The macroeconomic underpinnings of adjustment lending

Drawing on conditionality and implementation information for 184 World Bank adjustment loans to 62 countries during the 1980s, the authors examine the macroeconomic underpinnings of Bank supported adjustment programs. After looking at recent experience with macroeconomic conditionality they conclude that macroeconomic policy reform and improved macroeconomic performance are critical to successful implementation and sustainability of structural reform. Further, they conclude that macroeconomic policy and sequencing issues increasingly have been addressed explicitly in the design of recent adjustment loans, but there is still scope for : 1) strengthening the analytical framework and macroeconomic policy conditionality in adjustment loans; and 2) greater realism about the time and external resources needed to achieve adjustment and growth objectives.