Bilateral Aid to Africa and Structural Adjustment Loans: Conflict or Consistency?

As will be clear to readers of other chapters in this book, structural adjustment loans (SALs) are granted under the condition that the recipient should adopt certain economic reforms which the donor believes will improve its capacity to develop (in economic terms) and to absorb aid effectively, i.e. improve its absorptive capacity. Such loans form part of what can be called policy-based lending (PBL), which also includes sectoral adjustment loans and IMF conditionality loans, which is basically an extension of programme lending with the objective of improving the (economic) policy environment in developing countries. Our discussion relates to PBL in general, although we often confine attention to SALs on which there is more information. Furthermore, attention is limited to the developing countries of sub-Saharan Africa (SSA). These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.