The effects of structural adjustment programs

The SAPs are supposed to allow the economies of the developing countries to become more market oriented. This then forces them to concentrate more on trade and production so it can boost their economy. These programs include internal changes notably privatization and deregulation as well as external ones, especially the reduction of trade barriers. Countries which fail to enact these programs may be subject to severe fiscal discipline. Critics argue that financial threats to poor countries amount to blackmail; that poor nations have no choice but to comply.

Structural Adjustment Programs were often criticized for implementing generic free market policy, as well as the lack of involvement from the country. Critics argue that the similarities show that the banks, and the countries that fund them, are still overly involved in the policy making process. Increasing the stability of investment by supplementing foreign direct investment with the opening of domestic stock markets ,.

They emerged from conditionalities that IMF and World Bank have been attaching to their loans since the early s. Structural Adjustment Policies, as they are known today, originated due to a series of global economic disasters during the late s; the oil crisis, debt crisis, multiple economic depressions, and stagflation.

While the main focus of SAPs has continued to be the balancing of external debts and trade deficits, the reasons for those debts have undergone a transition.

Today, SAPs and their lending institutions have increased their sphere of influence by providing relief to countries experiencing economic problems due to natural disasters, as well as economic mis-management. Thus, SAPs are unnecessary given the state is acting in its best interest. However, supporters consider that in many developing countries the government will favour political gain over national economic interests; that is, it will engage in rent-seeking practices to consolidate political power rather than address crucial economic issues.

In many countries in sub-Saharan Africa, political stability has gone hand in hand with gross economic decline. Hence, some argue that the democratic policy process of countless countries has been undermined by decisions formulated miles away by western economic bureaucrats and that the implementation of such policy has solely benefited the largest donor countries the U.

For example, the opening of countries to outside investment allows U. The corporations are able to exploit the surplus of inexpensive labor, and usual lack of environmental regulations to create goods at a lower price. As a result, corporate profits rise and trade flows increase for that particular country. While this increases the GDP the majority of the profit actually benefits the corporation and the country in which the corporation is based.

Conversely, many argue that the people employed by the corporations are desperately in need of any work at all. It is argued that the alternative forms of employment or life styles available to them are much worse. Structural adjustment became a major tool for global development of a system of nongovernmental organizations allowing for bypassing local administrations in poor countries in the realization of welfare policies.

A common policy required in structural adjustment is the privatization of state-owned industries and resources. Ostensibly, this policy aims to increase efficiency and investment, and decrease state spending.

State-owned resources are to be sold whether they generate a fiscal profit or not. Critics have condemned privatization requirements. Furthermore, state-owned firms may show fiscal losses because they fulfill a wider social role, such as providing low-cost utilities and jobs. Many scholars have argued that SAPs and Neoliberal policies have negatively affected many developing countries; the privatization of water in Bolivia and the privatization of the health system in Sub-Saharan Africa are few examples of such negative implications.

Privatization makes essential needs such as water and health care a commodity, and those who are poor are unable to access such basic necessities because they are unable to pay for these commodities. Therefore, many scholars have argued that SAPs are not in the interest of the borrowing country, but rather caters to the elites of the developing and undeveloped worlds. In other words, SAPs are extremely detrimental for poor countries who have structural adjustment programs in place, as many people cannot afford to pay for health care or education, leaving populations sicker and more uneducated.

This causes negative consequences, as sick people are not productive and cannot work to bring themselves out of debt; therefore, the privatization of a previously social service such as health care is actually counter-intuitive to the alleged purpose of structural adjustment programs.

The agricultural, anti-land reform and food trade policies associated with SAPs have been pointed to as a major engine in the urbanization of the global South, the ballooning of megacities, worldwide migration towards the global North, and the growth in urban poverty and slums.

In the irrigation sub-sector the trend has been towards disengagement of governments from irrigation development and management. This has led to a process of delegation of maintenance and operation activities of irrigation schemes to the organized users with mixed results.

They are also a source of contention for environmental activists. A large portion of SAPs policy on agriculture focuses on the increased use of fertilizers and pesticides which harm the health of local bodies of water and therefore fish populations.

The runoff caused by the over use of fertilizers increases the amount of algae in local water bodies, causing different scales of dead zones areas where oxygen is completely consumed by decomposing algae and fish, making it impossible for life forms needing oxygen to survive in the dead zones. Dead zones affect both local and international bodies of water. An example of this degradation is, as Tiemen and Koeing reveal, Western Mali during the s. Firstly, the privatization of the agricultural sector increased the inequality of food distribution and inequality wealth in general as some farmers adapted to privatization and flourished and others fell behind.

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Crit Public Heath ; doi: Download references. You can also search for this author in PubMed Google Scholar. MT conducted the literature search, collected the data, and drafted the article. TS identified the grey literature and contributed to writing the manuscript. All authors read and approved the final manuscript. Correspondence to Michael Thomson. Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Reprints and Permissions. Thomson, M. Structural adjustment programmes adversely affect vulnerable populations: a systematic-narrative review of their effect on child and maternal health. Public Health Rev 38, 13 Download citation. Received : 04 April Accepted : 20 June These programs include internal changes notably privatization and deregulation as well as external ones, especially the reduction of trade barriers.

Many scholars have argued that SAPs and Neoliberal policies have negatively affected many developing countries; the privatization of water in Bolivia and the privatization of the health system in Sub-Saharan Africa are few examples of such negative implications.

Before the reform period, the government both delivered inputs to, and collected outputs from farmers, even in the more remote areas. However, with the introduction of the SAPs in the s, subsidies connected to agricultural production were severely reduced. Table of Contents.