Economic reform and the poor in Africa

Has economic reform hurt the poor in Africa? There is little disagreement that most African countries faced an economic crisis in the 1980s, characterized by worsening budget and balance-of-payment deficits, stagnant growth, and slow improvement in general indicators. Far less consensus exists, however, on the appropriateness and effectiveness of the macroeconomic and sectoral reforms these countries undertook in response to these conditions.

More contentious still is the subject of this book: whether the poor are hurt, in absolute and relative terms, by the economic policies designed to restore macroeconomic stability, reinvigorate markets, and rationalize resource allocation in Africa. Critics claim that, while orthodox adjustment policies may make sense at the macro level, they have high social costs. Proponents deny that living standards have declined as a result of adjustment policies, arguing that any declines are due to other factors.

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The contributors to this volume employ empirical methods to separate the effects of the economic crises that induced countries to begin to adjust from the impact of the economic reforms themselves. This approach is more sophisticated than the standard comparison of economic performance and household welfare before and after reform, which attributes all changes to the reform process.

With these models, the authors examine the impact of specific policy reforms - under the broad headings of trade and exchange rate, fiscal, and food and agricultural sector policy - in specific countries. The countries covered are Cameroon, The Gambia, Ghana, Guinea, Madagascar, Malawi, Mozambique, Niger, Tanzania, and Zaire.