Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized STRUCTURAL ADJUSTMENT LENDING A CRITICAL VIEW . E 1 1 i o t B e r9 ( Co n s u 1 ta n t ) Alan Batcheider {Consultant) CPO Discussion Paper No. 1985-21 January 198S ORA FT FOR s-AFF USE ONLY CPD f?52.l CPO Discussion Papers repor: on work in progress and are circulated for Bank staff use to stimulate discusslon and i:omme11t. The viev.;s and interpretations are those of the aut.hors .. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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STRUCTURAL ADJUSTMENT LENDING A CRITICAL VIEW .
E 1 1 i o t B e r9 ( Co n s u 1 ta n t ) Alan Batcheider {Consultant)
CPO Discussion Paper No. 1985-21 January 198S
ORA FT FOR s-AFF USE ONLY
CPD f?52.l
CPO Discussion Papers repor: on work in progress and are circulated for Bank staff use to stimulate discusslon and i:omme11t. The viev.;s and interpretations are those of the aut.hors ..
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Preface
The paper was prepared as a contribution at a training seminar at
Easton in May 1984 on Structural Adjustment Lending. It was presented as one:
part of a session on SALs, the other consisting of a presentati0n by Stanley
Please entitler\ "Structural Adjustme;1t Lending: A Supportive View".
(Mr. Please's views have been published in his book entitled The Hobbled
Giant.) The two presentations were intended to initiate a discussion by
participants. The paper was further discussed at an internal seminar, at the~
Bank, in October 1984. The present paper, therefore, does not aim at
d~veloping a comprehensive and balanced assessment of the experience with the
Bank's structural adjustment lending. The focus is on developing a critical
view. The paper concludes that incremental strategies of reform as opposed to
the global and comprehensive adjustment attempted through SALs may be more
effective vehicles for policy change. lt makes a case for "longer t!.me
horizons, more modest expectations, and smaller scale approaches" in the
Bank's policy based lending.
While this version reflects some of the comment:s made by Bank staff
and others at the two seminars, the views expressed are solely those of the
au tho rs.
Luis de Azcdrate
CONTENTS
I. INTRCOUC'1'ION
II• OBJECTIVES ANO CHARACTERISTICS OF S&LS
A. THE EVOLVING RATICNALE FOR SALS
B. ALT~RHATIV~ IN IHE CHOICE OF SAL CHARACTERISTICS
III. ~O MONTHS OF S~L EXPERIENCE: A STATISTICAL PROFILE
IV. ANALYTIC CRITICUE
A. LACK OF CLEAR SELECTION CRITERIA
B. WEAK THEORY OF REFORM
C. OVERDESIGN AND KISSPeCIFICATION
1. Exceaa!vely Coapr•h•~~ivo end Co•pl•x
2. Toe ftuch Explicit Condition~lity
v. CONCLUSIONS
T~Bt.ES 1-8 FOOTNOTES
~ 1-7
8-18
8-11
11-18
18-20
20-46
22-32
32-46
33-38
33-4t.
=
STRU~TURAL ADJUSTft~NT LENDING • fl. Critical View by
Elliot Berg and Alan Batcheld•r
1. INTRODUCTION
Since 1960, there haa be••'l a £lo"'•ring 0£ "new at.yl•" World Bank
~ending characterized by a policy £ocua and conditionality. Thea a
loan• and credit• include export rehabilitation credit•, which
Tl\.e di:f'ference• between the new atyle, policy-baaed l:ending and- -
"traditional'" aaaiatance can b• exaggerr&ted. ProJec:t loe1na can <and
do> c:ontai~l .::ovenanta with perlor•ance condit.1.ona. And non-proJ•ct
lending i• hardly new: Bank <and ~ther donor> "progre1•'" loana in the
;;a.at.. p~ovided £ree-atanding end qu1.ck-dieburaing £oreign exchange.' -- - ·
.!1.u.t th• dj,££erencea are reel. Conditionality waa not a •1alient: -
• Thia ia a revia•d v•raion 0£ a ~iper praaented at th$ Structural A~Juataa~t Seuin•r~ May 7-10, 1~84, and a Bank S••inar on October 4, 1984. The preaent veraion tak•• account 0£ co•••nta •c:d• at th••• two •••ina.ra, either by incorporating th•• in th• text oz· by noting the• in £ootnotea.
.•
Page 2
feature of prOJ9Ct loan• in th• paa~. And Bank progra• loa1na were
liait•d in vol~•o (~h•Y avere9ed atiout 7- o:f total bank lsndinQ in
the 1970•> and in goal•: they were ai.med at eaaing balancr.- of
payaents cr1••a that area• fr~• export earning shortfalls or natural
c:liaaatera. -sector Leana." as defined io Bank operating rul••·
financed slicsa of aector~l inveataont pregraaa and w•r• irn general
reatrict•d to c:ountr1•• w1th goc:.d planning .snd 1•pleaant1nc;
capacity. ~olicy condit1onn w~r• •1n1aal in Ch••• loana or credita.
l970a. the ••1na~ree• devel~paent lii•rature gave relatively little
dttention to th• ia:.>aet o:f policy Ox'l econoaic per:foraanc•· It wa.a
rarely i9ner•d altogether. but for noat writer• of the :i.oa · ,Jnd 60a.
what really counted waa capital !nv•At.aent and tec:.~"=!.!.ogy
2 trana£er. Even wh•re policy re!ora we.a explicitly cona..,d11red, ·ita
iapact waa Judg•d to be aodeat.
Tho heavier w•ight now being given t.o policy and to pol.icy
retora rai••• many interesting analytic ia&uea, of which two will be
considered here. First, what are the chang•• in tha in~11llactusl
ratio:'l«h°l for roaource transfer•, wh~n growth i• conatr11ir.~id ir. a
refer• -in aoat 0£ th• SAL c:ountri••• though it ia too aeon to be
au.re of thia •. As 0£ aid-1'384. obaervable, relatively una11biguoua
• .aank ataf~ point out elao that polic:y-baaad lending i• new and experiaental,. and that aany adJuat••nta are being aade ea experience ec:c:uaulat••· In £ec:t. aoae argue. aany of th• critic:i••• in thi•• p&per are being addreaaad.
·-
Page 7
-failur•s'' have occurred in only thr•• of th• l& SAL countri••--in
Senegal wh~r• diaburaeEenta were atopped. and in Guyana and Bolivia~
wh•r• run-on ShLa were denied becauae of inadequate perfor•ance.
Non4th•l•••• genuine probleaa do exiat with policy~baaed lending
in general and the SAL in particular. Firat. th• criteria for
selection 0£ SAL countri•• are not clear. Secondly, the theory 0£
re£or• on which the SAL reota ia not clearly ~pelled out~ Thirdly,
the SALs are. often too co•plex. and 5a!:.·oc:!y too mu.ch fictional
, conditionality. And finally, conditionality aa expreaall'lrin the
SALs may obatruct 6chieveaent 0£ th• £unda••ntal obJ•ctive of policy
dialogu•,: which i• the changing of •ind• about what i• good policy.
Th• reaainder. of the paper 1• divided into four parta.; Part II
- ::-_eviewa. the evolution of th• Bank' a rational• for the SAL progra•
and, aurvey• th• array of choice• that were available to fraaera of
SAL s.trat&gy. Part III preaenta a atati•tical picture of experi•nce
w.1th- SALa; the kinds of countri•• ad•itted to the progra•; the
iapor~anc• of SAL aoney to th• borrower•: the additionality 0£ SAL
money; and th• growth experience 0£ countri•• ~it~ SALa. Part I'll'
of£era a critical analyaia of SALa, and Part V is th• conclusion.
Page 8
II. OBJECTIVES AND CHARACTERISTICS OF SAL.S
A. 1'HE EVOL.VING RATIONAl.E FOR SALS•
The Bank £irat int.roduced SAL.a in early 1'380. rn their original
JU•ti£icat1on• 0£ th• new lending inatruaent, Bank o££iciala
atr••••d two conaiderationa: £irat, that th• L.DCa# external
econoaic envlron••nt had recently beco•• diattnctively di££erent,
alowdown o{ th• CECO econo•i•• on LDC export earning•; and high
rat••-0£ induatrial country inflation and conaequent high iaport
pric•~- £or LDC•. Deteriorating t•r•• 0£ trade and growing _curren.t
account de£1cita were creating increa•ingly severe resource
conatra1nta, and were giving ri•• to wid•~Pr•ad BOP cri••• in th•1
developing countri••·
Th••• three external developaent• were id•ntif ied aa peraanent
.:or at leaat long-tera> in character and, therefore, a• requiringr
"long-~•r• atructural 4dJuataent• in th• econoai•• 0£ ~h• developing-
-countriea.... Bank o££icera announced that they w•r• prepared to 1111ake - '·
• . One- ueainar participant ob••rved that no theoretical rational•t waa really needed £or the SAL.. A great •any count:ri•• were in d•t•p econoaic: trouble in 1980, and weya had to b• found to h•Ip th••· Th• SAL. wa• one reapon••·
Page '3
ata£i and conaultanta available to aaaiat ~overna~nta in the proceaa
0£· structural adJu•t••n~.
But the ai'.uation wa• viewed aa calling £or meire tt1o4n o4Q1/.iaa.
In early 1980, th• Bank pro,l!foted that ourt"ent account de£ici1:.a of
low inco•• countrie• in 1980 would be triple their 1978 level,, and·
rla~ ~~ nearly five percen~ aa a ahar• 0£ GM~. Bigger de£ici1:.• were
predicted £or 1981 and 1982. Reaponding to thi• iaaediate and
potentially per"iatent criaia, th• Bank introdur.ad SAL• and •~ld:s
th•• quick diabur:aing to reduce growth-inhibiting raductiona ;Ln
iaporta !n recipient countriea.
By early 1981, high interest rates and sl~w growth 1n.
concessional asai.atance had·been added to th• liat 0£ 111>eternal
change• ]Uati£ying the new £era 0£ Bank help, b~~ "c~ntinumd high
x·atea 0£ in£lation'" h'ld be•n dropped. Kore aigni£icant, again in
eftrly 1981, Bank o££1cials began to cit• "inappropriate do~e•tic
pol1c1ea" aa growth obatacl•• calling £or baaic structural
ad]uat•enta that would d•••rve Bank encouras•••nt and aupport,.
A• a reault 0£ internal reviewa and evolvin; experience in 1981
and 1982, t~~ BOP aspect •oved ta a aecondary poaition 1n Bank
diac::ua•lona 0£ SAL•. The need for policy change• received
incr•a8:1ng ••phaaia. Land•ll-Mill•' D•c••b•r 1982 paper re£l1tet~
t.1'1~!6 tranaition. H• cit•• the long-ter• ri•• in energy coat.a,, the
rlae ~n price• 0£ aanu£actured i•porta, high intereat rates, and
receaaion aa change• in th• external environaent callin~ for Bank
Page 10
3 aupport £or structural adJU•t•ent. But he then gives
"'111appropriate do•••tic polici••" aa an equally important £'actor.
He writes:
· Conceptually, structural ad3uatL4~t ia designed to ~••pond to peraanent changes in the exterrial environaent and aay be distinguished :fro• structural re:fora to correct. :for. inappropriate doll!.eatic policiea. In practice, th••• tw10 e1leaenta. becoae inextricai:lly interrwoven and cona.aqu•ntly. n.on• o:f the prograaa supported by structural adJ?.lat.•ent. lending aay b• regarded a• solely. correcting :for •x~•rnal •:hock• • • Many o:f th• re:foraa proposed under SAL ar•1 long overdue and ar• not neceaaar1ily apeci:f:lcally ~·<!tlat.ed
t.o the changed international pric:,• atructurn. They, lri o!l dld.;igned, however, to hdve a direct iapact cm thC1 BOF-
Th• BOP equilibriu• obJective ha;a i1cav•r diaappetiroc;i a•• a
ratic1nale £or SAL.a. The SAL. prograa 'i• a reaponae to exiat.~ng or
!••inen~ BOP criaea and it• obJectiv~ 1• to help L.DCa aake internal
adJu.11~1'enta that will accelerate growth now and produce•a
su&t.o!l1inable balance on c:urr· ,nt ac~ou~t in the aediu• t"~• crf 4.;6
. yearel_• Bu.t the eaphaai• within the ~tsnk clearly ah.'i.£ted d1.;1ring 1982
to '?C'llicy re:fora. indeed, one aapectt receivea auch eaphaaia: t.ha·t
SAL. 1aoney. will bring Bank repreacntatlivea to th• borrower•' policy-·
a~king "high table," the level• of govern••nt where policy i•
decided. Thia,· Bank aanageaent a•••:r::t•to, ia where .the pclj,."cy
~ialogu• can be •ad~ aoat e:££ective.
Th• Bank d•ciaion to aove ac .. ,;· • aggreaaively into iaatt111i.:·~ ~f -
hig?-1 econo•ic policy ia conaistent wi;t.h the intent 0£. a.!my o':f it•
£oundera:
The Fund and Bank are not buain•~• in~titutiona in th• ordinary oenae. W:il• they iauat b• ~~•ra~ed ao aa to conaerve their
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aaae~a and allow the aoBt !ruit£ul uao o! thoir !ac111tiea, they are not pro£1t-•aking inatitutiona. Tho bu~inoaa 0£ tho Fund and Bank involvea aattora 0£ high economic polic~. They should not. bec:oae Juat two ao:i:"e £inancial institutions.
'The.Fund haa cun•iatently •nJoyed·that involve~ent. Tho Bank has
~apparently had retlaona., up to the preaent., to ope·rate at a alightly
l••• grand level.
B. ALTERNATIVES IN THE CHOI~E OF SAL CHARACTERISTICS
The rationale £or SALa hea thua eo111a to :f'ocua c:in tho-
developaental uae:f'ulnesa o:f' re£orain9 domestic polic:ioa and on the
tie to loaria large enough to win ac:cesa to the aont aenior policy - -
· .. aekera., thereby p&raitting Bank ata£r:f to accelerate re£or•t cind to · ·
.. in:£luenca it• character. But in the beginning., lorig-t·era ·c:h~ingea in:
the LDCa"' external. trading anvironaant had been eiaphaai:z:ed aoat., •• · ·
had the need £or quick diaburaementa to raducG BOP gapa. i'heaa
~ -·
~ "'~·!o~•pt.iona prevailed when tho Bank' a aanag@aent" waa dec:idi;ng how t:o • · '· ·
ahape th• SA~ progr~a.
Th• charac:tAr1atica oz the prograa were certa1~ly not·
:.£oreordained. The Bank' a innovators c:oz:icaivably had val:'i.O\la
elternat1vea., aoae ~£ which are auggaated belov. · '··
- .-~Sell. Adv!Sf•· GJ,va It. or Rawal\'d Users?
0£.Ban~ o££iciola ware that. good atructural adJu•t•ent prograaa would
.. be. d~££ic:ult ~o c.ea1gn and that country designer• could be greatly : ·
~~elped by acceaa to t.h• expertiae 0£ Bank ata££." The ·aanknau the~
to. decide wh"t.he.:- t.Q aell advice., in the aannGr 0£ aoat. o£ ·t.he
·. wor19!a_conaul'e.•anta., to aubaidize or give 1t away., in tne ~i11anner Q-£
_. 9·~:o: ~genci•• <and t.be Bonk ate££)., or to attach 1t. 't;a .att::l:'oc~iY• ·
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loana that would induce countries to apply advice they might not teka
in the ebaence of the loans.
It would no~ have been inconceivable to aet up a policy-advising
unit~ independent of lending operations. But this would have been
contrary to the BenK'• atyle. The deciaion therefore was to attach
advice tQ loana.
••How Much Money in an SAL 1 Once the decision waa. 1ulda to tia _
.... policy advice to loana. the Bank had to doc:.1.da on a :aat.hocr £or
deter•_ining the aize 0£ eac:b loan. In acme Bank discussion. it was
proposed tha'C. the size of an SAl. ba linked to the '"costs ~f
_i11pl.e•entin9 pol.:»c:y re£ora... So th'9 decision 1111:9ht have boen to aake
~he locSna J\Jat big enough to cover the coata 0£ 4dJuatiaen1:.- ·
. ; . < inc_luding •. perhapa. the coa'C.a 0£ c:o11pensatin9 loaara >. ~rn«it. would
have aade SAi.a like proJ•Ct loana in the sense 0£ fixing 1:.heir aize
to •at.ch the coata identi£ied with their 111pleaentation •
. Givan the SAl. prograa' a early eMph.;;:~ia on BOP crises,, the
dec)A:oi~~ could alao have been to have each SAL cover aoae ap~c:i£1ed
portion of the· country'• anticipated BOP de£ ici t. · In the event the
knk deci.ded that it would not. atteapt to cut the loan ta aatch the -
~t:a:- 0£ .. i~ple11enting re£oraa. nor atta11pt to aati11ate the .eoata- 0£ :- l: ~ - ·
_1.ap_leaenting rei'·.)raa.. But the Bank did decide t:o- coordin•ste wi.th the-·
IMF_. a_nd to take account 0£ BOP de£icits in deteraining S,l\l. size.
The principles.the Bonk uaea to decide SAl. aizea are d1.ffic:ult
to d_\acarn_. Since. an iaportant Sank ob-Ject ia to obtain a s·eat- at
&ach borrower'• policy table, the lean haa to be big enough to brir.9
~t ~~~·· But •any other 1n£luencea"operate••the reg~ler country
lendJ.ng. criteria. th• proJec:t pipeline. ate. And ·externel event.a·
Page 13
iapinge: for example. the £irat Ivory Coaat SAL wan 1ncreased 50~
.when th• n&tion'a BOP suddenly worsened,
--How Much Add1tionality? The Bank aight hav~ decided that each
SAL would be additional to the total allocation thq ce~ntry would
oth•rwia• have received. In practice SAL countriea have received
ao••~additicinal £unding--on the order of 1~-30~~-though existing data
--How to Schedule Rel~ase 0£ the Funds? Given the 5-6 year tiae
horizon 0£ SAL prograas. the Bank aight have decided on one total £or
_the whole period with releaae scheduled evenly over the included
aontha.- Instead, it decided on a aeries 0£ loans. to a aaxiaua of
about £ive, apaced aoae 12-18 aontha apart when all went well.
The £unda could have been aaaigned £or use in praJ•cts, who••
authorization would have been conditioned· on particular polic1'
re:£oraa .• or <a• in traditional aec:tor loan•> :£or -ti•• in ·ti•• nlicea ·
0:£ public. inveataent prograaa, again with authorization conditioned
one particu_lar policy re:£or••· Inatead, the Bank decided to aake SAL•
prograa loan• with the heavy BOP connotation• th• Bank att.ach••s to
a:l_l p_rograa lending. Thia deciaion reatricted SALa to countrJLea with
••v•~• B9P_ probl••• and coaaitted th•~ generally to supporting change
only in poli~ia• and act~ons touching directly on the underlying
cau••• of th• participants' BOP probl•••· Thia deciaion. along with
oth•~•o aeena that no rate 0£ return calculations are aada on u••• of
SAL aoniea.
Page 14
Given the d~ciaion to divid• aach SAL prograa in=o up to 5
seqµ•ntial loan• with each conditional on ac~0Rpl1shacnta during the
per1od of the preceding loan. the Benk aight have m~do all of ~ach
loan available on its effect1veneas datG.
for Mauritius and Thailand, all SALa hav• involv~d at lcaat on• ~1d-
ter• tranche with releaa• conditional upon pftrticul&r policy x·efor•s.
--How Much Control to I?ut on Money Uae? G.iYen all.- 0£ t.!·u1~ abo-.iei,
the tiaing of release of SAIL. funda aight ati.ll have bc~n tied in p6'C't
to particular uaea of th• aoney. •·9·• to particular ti•ln~ in-BOP
"needa" or to counterpart funding for particular proJe<:ta or other
purpoaea. Inatead. tranche releaaea are made without any
consideration for i~••dicte need& fo'C'. or uses of. th• fund•~
One• releaaed. the funda now are aubJect only to a negative
l1at. 6 Many SAIL.a do apecify. however. that the counterpart funda
ahould be uaed to finance parta of the public inveat•er.t prograa.
,-.-When Should· Repey•ent• Be Co•pl•t•d? Since SAL . .progra11._ a.aeJc.. __
aua~ainable current account balance• within 5-6 yesra. repey111•anta
might begin then and be coapl•ted aeon efterwarda. In fact. all ~AL•
<aa diatinct £re• SACa> have grace period• 0£ 3-5 Y••r• and rftpayaent
per1oda.;0£ 15-20 yenra. Obvioualy. i:£ the repayaent period• were
ahortenecl. 11or•· aon•)' would be-available for additional SALc--or £or
other uaea.
PreoYaably, aa a SAL prograa evolvea. the rate or return will
r1aa..£or at leaat ao•• proJecta in the country. For ·thi:a reeaon arid
othera,_SAL prograaa aight cell for gradual raductiona in the aize of
th• SAL loan• and gradual return to proJ•Ct lending. Thua f&l~. thia
doea not appear to have happened--although the standard provision
Page 15
o! a three-year grace perio·d for th• higher 1ncone countr1e~ g•:)eA
so•• way 1n th1~ direction.
--How Broad 1n Scope? Th• :first SAL• were relatively narrow in
%ocua: the Kenya. Turk•~ snd Phillipin•a loan• concentrated :on trade
' and induatrial policy. £or exaMple. Over ti••• the •cope has
true for eacfi country•• aucceaaiv• SAL&: Kenya I had 9 conditions.
Kenya II 42: Turkey I had 11 ccinditional it•••· Turkey III $5. And
1t i• true :for individual SAL•. which ty~1cally carry 35-85;
condit.iona.
It. ia not altogether clear why th• ~AL becaae ao coapreheii1ai..,•
in ac.:>pe. • On• :factor aay have been the :belie:f tha·t.
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th~ center o:f deci•ion aaking authority. : Arguaenta about "~yn•irg-1••" I I
~ay alao play a role: that broadening o-£ policy diacuaaion: in one
: 7 sector open• up poaaibiliti•• in other aec:tora. Noraal I I
bureaucratic :factors aay alao b~ at work; aec:toral and :funetiC)nal I I I .•
bureaus-do. not like to a941 their apec:ial ,area o:f concern n•,l~:ted in
any aulti-purpo•• prograa.
ror whatever rea.-ona. SAi.a have bec9•• highly coaplex.' wi1:.h very
• One Bank ata:f:f •••ber •:)baerved. in ••minar diacuaaion th;at coaprehenaiveneea ia coaaet.ic: in aoat ca .. a the :focua ia o:n t,.,o or
: . thr ... key policy pointa. Another aaid t•etical conaiderati;ona could--- operate: a larger nuaber o~~ it••• allow• I e111ph•a1a on progr•i•• 4::1ft
aoae,. depending on circuaat.ancea. Se¥•r•l people argued t~at coaprehenaiv•n•••- haaa not i.apeded policy i dialogue. ,but ·rat~er i?Bproved it. Al•o. ac:cordinq to another,pcrtic.ipant. a co~prehanaiv•
SAL alllowa proJec:ta to bci put in their ~~toral and 111acro~con•o•ic contexta.
~road policy ~ov•rage. Th• principal refer~ areaa nov. are:
i•~rove•ent in trade regi•••• aob1lization of x-eaourcea, 111proveae'nt.
in e!fi~i•ncy ~f doaeatic resourcQ uae, and innt1tut1onal re£ora•·:
In~titutior.al co~ponenta have ~eco•• 1ncreea1ngly ~ro•1nent. Alacat I
all SAL• now hav• ~ aaJor prov1a1on on debt aenageaent 1nst1tutio~a,
on. public inveat••nt progre• aanageaent, on pi1blic enterpriaea, a~d
on agr1cultural inatit~tiona. ?lann1n9 ••chanisaa ar• addreaaed in I
seven SAL•. and £or•4tion 0£ pol1cy-~aking unit~ ia proposed in n+ne.
on t.h• aaauaption th@t doae..'Jtic LDC policiea were aore or leaa OK, ao
:· that· a rough haraony preveJ.led betw .. n theory and the role of.
_ ~ de"'9lopaent inat.i tutiona. What le.sa developed countr1ea naededl to
•According to ac;•<a Bank critics,. thia section i.s baai'cally· wron9. in that it atra•••• too auch the aupply aide--J.~e~. tha Bank -- : aa decJ.d~r 0£ which country aholl get an SAL. In -fact, they-aay, the p~oola• i• not that there are ao aany countrie• claaaring £or SAL• that. :th• .Bank haa th• luxury o£ choJ.ce. It ia rathei:- that ve~y !ew count~i•• ara willing to accept the conditionality o-£ the SAL. Our anelyata a.oauatta that aany countries £ind the SAL an attractive £ora o-£ aid.. end era not auch concerned about the conditionality aapect. In our v-1ew. the aain generators o-£ SAL• are within the Bank: B•nk ata£:£ reapcnai.!:ll• for port1cular rogiona or countriea are the pr.\.ncipel dflC1dera 0£ wh1ch country •hall try !or an -sALi t~oug.h the· cli~nt country o£~1ciola and aenior Bank aanogaent. 0£ cour••• pl•Y o role i'n the 1n1t.1•l pheaea, end a doa1nent role in th• final dec:iaiona·.
-:
Page 23
grow £a~ter we& ca9ital invaatment and suitable technology, and the~•
wer~ wh~t the world developaent agencies were geared up to provide,
mainly through proJecta.
Letting the ?olicy genie out of tna bottle has changed all
that. Pera.1atant poverty and slow econo111ic g't'Owth are no'w r1ncognized
as ste••ing not only fro• resource sc•rcity and 1iaited technology,
but also fro• inappropriate doaeatic policies.
q~•ations i••ediately ariae. Why don't governaenta change the
policies that are holding back their development? Why don't they
adopt th• reforaa that •xperts tell the• will raiti• bo~n their.
curr~nt national output and their growth rata. thereby increasing th•
economic welfare of their pecpl• and brightening their futur•
econo~ic proapects?
That's the first question. The.second is: what hes money got
to do w1tn all this e~yway? Why do exter,al donors have to pey money
~o 1nduc• LOC Govern••nta to do th1ngs that wu Cend presuaebly ChftyJ
believe w1ll 111ak• th•• better of£?
BAnk aanag•~•nt end ate££ have not ~gnor~d theae questions.
They are touched on :!requ~ntly in Bank documents-and in ate££
convaraationa. But they have not r•crived much syateaatic att•nt!ln-
and thia aay be on9 0£ th• reaaona why. after ~our years.
uncerta1nt1ea about SAL• peraist in ~any perts of the Bank.
i.lhy then aren't preauaably banef icial policy and insti ti.1tional
refer•• adopted? Everyone'• li•t 0£ reaoona alght ba different. but
the following £actor• •••• ~•ntral.
n> Vested int•r••ts stand to lose. froa proposed refer••• and
these peopl• or groups dre powerful encllgh to prevent their
I
I
Page 24
6doption. The
' I •
whole ruling claaa or ruling •lite aay be at isaue. In~eed, soae 0£
the clisaaic writara on developaent adopt this
for exeaple, an~ critic• 0£ the post~colon1~1
poaition-~Paul Barari I I
. I elites rurn1ng £roa
'
Franz F~non to Rane Dumont. In aore technocrati~ anaiy~ea, the , I
a~orl'1. p~9gre•a>, la not really relevant to SALs or to pol;Lcy-baaad
aa~~rce trana:fera in general; it la an arguaen~ :for technical .... ·': -
saiatance and training, not :for SALs. By iaplication, •or.QoYer. it
l:J99•ata th~t the inatitution-building .and learning e:fii!cta o£ SAI.a
ay:~•.1111.all~ ainca the work 0£ devising the policy packagoa 'in theae
nataacea :fall• to Bank ata££ <or conaultenta>. with little genuin~
articipation by local tachniciana or policy 111akera.
Tbe notion th~t SALa can be instruaenta to ovarcoae tJ'• anti•
e:for• obJ•ct.iona o:f local veated intei.·eat.& haa ·a certain·
laua1bil~ty. But ita ••pirical content la not clear. and analytic'
ueation aarka peraiat. ror example. the aachani.s• by wh!.c:h SAL
oney luoric:ataa th• proceaa ia not cle11r. Co111panaation o-£ roaera ia
ev•r:•xplJ.citly propoaed in SAL agreaaunta, nor woul·d 11anl' people
ona~~er. it ~lwaya deairable: th• loaer·a are oiten lQaing ill-gotten
r il~~d•aerved gaina anyway. In any caae, governaenta ar11·unlikely
o be ~ill.109 to u .. par~ 0£ o £ore1gn a.aaiatanc• package t.o provide
. :- -
I I I I I t I I !
I I
Pag•a 28
luap aum coapansation to psopla loaing a £low 0£ benefits.
The "atrenghtening the good guys'" proposition, which r·eceives
heavy emphaaia, ia clearly ;;;ertinant. But it does not see111 robuat.
~nou9h to bear the weight put on it in analysis 0£ SALa. Thia ia so
partly becauae th• aaae argu111.ent can support other £orms 0£
conditional lending. But there alao exiat so111.e queationa e1bout ho""
111.uch th• local re£ormers are really helped. It ia ~ertainl.y possible
that Bank conditional lending can tilt the internal balancu 0£
bureaucratic and/or political forces in a pro-reform direc1;ion. But
a rather •ore negative scenario is •qually plausible; that the
position of local re£ormera ia undermined by their aaaocia1~ion with
Bank-aponaor~d policiea~ they becoae identified aa "puppeta," th•
policy idea~ in question become taintad--"the Bank's" ideaa. Thua,
in Nigeria th• agenda propoaed by t~e Bank £or industrial ;policy
reform ia said to be regarded aa "the World Bank'• program" and thi•
haa apparently aade Nigerian econoaista reluctant to aupport it
\)ublicly. Similar reactions have been reported £rom Kenya. A recent
article entitled ""Adviser• are Blaaad £or Econoaic Woea" <~~
Nation. Nairobi, April 12, 1984> report• a Parliamentary debate
during which "Econoaiata responsible £or adviaing the Pra•ident on
Kenya'• policiea • • ~ were attacked £or not doing it correctly"
10 aince they blindly follow the advice 0£ the IMF.
The propoaitl.on that the. SAL. aak•• ita contribution t.o policy
re£ora·by iapoaing order on undiaciplined 0 £ragaented LOC policy
aeking· proc••••• ia rather novel and not well-developed. In Stanley
•
Peg• 29
Pl•a••'• dr~ft pap•r. th• disciplinary •ff•cts of SAL~ on the Benk'a
own policy proc••••a are deacrib•d aor• fully than th• i•pac•t:. on SAL.
11 r•cip1•nta. Pl•e•• 1• quit• t•ntativ• 1n this draft pap•r end
ecknowledg•• that country •xp•ri•nc•• aay difi'•r. Two general
atat•li•nta ahould b• qu•ationed, however.
Firat. Pl•a•• seya <p. 21>:
11~nitorabl• end t1••-bound action progra• haa n•c•acitet•d that
deciaiona be aed• on policy iaau•• which in •any inatances would have
been l•ft unreftolved. •• This alaoat C•rtainly overatatea th• extent
to which SAL. condition• are "apecific, aonitorebl• and tiae-bound."
Many ar• "procesa" conc:!itiona--"atudying'" thia or "undertaking"
that. F•w in fact are aonito~abl• by herd crit•ria and.ti••-
ooundedn••• in any event doea not •••• to be such a %orceful
incentive, given th• fairly fr•quent delaya in tranche ~•l•a•••·
Th• aecond questionable arguaent is in the saa• paragraph!
In ca••• in .which th• relevant line •iniat•r hfta n•ither the will nor poaaibly the knowledge to initiate a r•for• of polici•• <induatrial protection, agricultural pricing and aarketing, etc •• etc.> th• cor• ainiatriea have b••n forced to b•~o•• •or• involved and in aeny inatencea pri•• ainiatera and heada 0£ •tat• have. also b•en deeply involved in daciaion •eking. I:1 .:'ith~r worda, .th• probl•• of th• fragaentation 0£ reapon•ibility which waa ••ph~ai%ed pr•vioualy ea th• ~•Jor institutional weekn••• in th• aaneg•••nt 0£ econoaic policy, ha• to ao•• •~tent, ·at leaat, been addr••aed and reduced in SAL end SAL-like aituationa.
How auch thia ia happening in practic• i• an eapirical question.
to th• clarification of which thoae with SAL country experi•nc• can
c:ontr1bute. In general. however, it ,,,ould •••• to. be unlikely that
bur•aucratic behavior of the kind indica~ed in thia atat•••nt would
have poaitiv• result• in "disciplining" local dacision-aaking.
Att~apt~. by cor• ainiatriea <Planning and Finance>" to·i11poa• pol.tciea·
Page 30
~irectly affecting sectoral •inistries would normally lead to
SAL'• ~:ffectiv•n••• •• a vehicle of policy refor• in variou~ waye: I
by ~preading ata:ff •o thinly that in-depth refor• effort• are
diacouraged; by aak1~g •ore dif~icult th• taak of genuin• pplicy
dialogun and training o:f local re:for••r•~ ~nd by coaplicati~g the
taax o:f •cnitoring.
•. Attention ia being ~ivcn to th• .. •attera in varioua parts <>£ t.h• · Banx. On• aeainar participcmt put :forward the propoai ti on them tfi• SAL allowa wir.nera and loaara to c:o•• together ao that i•pl
1
:1cit or exp.licit co•penaation arrang•••n'l:.• can be worked out: th• c:oa·tu and bema:fita 0£ a ref or• can be internalized in this way. 1ncr•a~iz2g t.h• cha.nee• of aucceaa. 1
- •
Pa9ca 33
1.
A• not~d earlier, th• firat SAL• tended to concentrat~ on one
aector".'-for exaapl• induatrial policy in Turkey, the Phili;)-ina;s and
K~nya. Condition• w•r• r•lativ•ly !•w in nu•b•r. and th~i~
apec~~~city waa liaited. Over ti•• th• SAL. haa c:o•• to inC'lUd1a aany'
aectora, aany aore policy conditiona, and nuaeroua inatitu~ional
A nuaber o:f probl••• aria• £roa th-• co9;prelhenaive
and coaplex character of SALa.
Firat, th• deepening o; r•:fora •:fforta can b• i•p•ded.
Broade~in9 of th• range o! condition• covered aay aak• it i,apoi•aHil.''
to bring 11uf:fici•nt r•aourc•a to bear on th• r•fora 0£ poricy .1n anyc
one ~cay aactor. Thia ..... to have happened i..n Kenya. for exa11pla,
uncoaaitted, poorly trained; authority ia rarely delegated; ·
ainiat~i•• hold on to in£orsation; an~ econoaic analyaia i& very
1.ap~r£ectly brought to b•ar on policy deciaiona. Undoubtedl11• ther•
l.& rooa :for dialogu• abou~ how to i•prove thea• adainiatrati"'• - ·
ayateaa, and t.h•r• i• n••d for aon•y and technical aaaiatancar. But
inclu.aion of the•• aattera in a larger. ti11e-bound package, ~lnd one
0£ heavy apparent conditionality, would •••Ill unneceaaary and probably
counterproductiva •
. Thar~ia a ralat•d point. On the one hand, the SALa hav• becoae
il"'cre.aaingly. coapreh•naive in acope, endowed with nu•erou• C1:l1nditiona
and often extre••lY d•teil•d. On th• other hand, difficu+tie~ of I
i•pleaentation are fr•quently treated in an extraordinari+y cavalier
way.: Thua in SAL a!tar SAL, one £inds exquisitely craft•~ diagn6aes
of particular probl••• Ce.g., inadequac1aa in the a1za and
Page 36
co•poaition 0£ a public inveat•ent progra•> £ollowed by a line or two
to the e££ect that: "Bank-provided technical aaaiatance will
strengthen the inveat••nt planning proceaa over the courae 0£ the
~A~.·· In back-to-o££ic• report• there are r0peated expr•a•iona of
dia_apprnntaent at alow progreaa in introducing rolling budgeta, or
reviai~g d~bt reporting pra~ticea 0£ paraatatala. or iaproving th•
organization r~ road aaintenance services. The intractability 0£
inatLtutional probl••• ••••• to b• a permanent aource 0£ aurpriae·and
disappoi.nt•ent. Th• Bank ato££ involved know th• l•••on: that theae
prob.iea.. are deeply-rooted in th• environm•nt 0£ underd•velop••nt.
requira auch aore thought.£ul attention :; ..• d will change alo..,ly even
with the aoat intelligent and auatained aaaiatance. B~t the l•••on
do•• not •••• to b~ adequately inatitutionalized.
Coaprehenaiven••• and Credibility
A third inconvenience 0£ lar9• aiz• and co•prehenaiveneas ia a
poaaib~• loaa 0£ credibility regarding conditionality. Thi• can
occur i.n two waya. Firat, becauae the SAL involvea a lot 0£ ~oney
and carriea he-svy ay•bolic value among private bank•r• and ot_her
dor.or•~- cance.llation beco••• too atrong a sanction to uae. Secondly,
it coaplicat•• th• e~aluation 0£ e££ectiveneaa by magn1£ying the
weighting problea: i£ Kenya geta a 8 on tariff re£or•. an A- on
rolling budgata and a D• on grain aarketing re£ora. how does th•
evaluat~on 0£ the SAL aa a whol• add u9? How ia th• Bank's sta££ to
decide whether to abandon, delay or carry on with a progra• in a
country w!.th both •any Aa and Da? Both of th••• crod!bility i.aauea
are £urther conaidered below.
.·
..
?ac;a 37
Personnel-Related Probleaa
Alao, the co•prehenaiv•naaa and co•9laxity 0£ the SA~ craataa a
set of spacial peraonnel-rela~ed proble~a. Firac, th& elaboration,
nagotiation and aonitoring o:f an SAL abaQrbe an onor•ou• aaount o:f
ata:f:f ti••· In aoao ca•••• it crowds out econo•ic end ••ct.or wo·rk.
Alao. the SAL. raquiraa akilla that. ar& particularly ra:ra.-
Econoaiata ar• good at analyzing aacrooconoaic probl••• i" an
~ggregative way, and ao•• can handle aectoral analy.,.a pretty well~
rh•Y.· ar•. good at diagnoaia. ••p•cially quantitat:i.ve: th.;.y can' ···aaur·•
e:ffactiva rates o:f protection and can calculat~ do.,.atic r•,aource · ·
coe££ic:ients. Bu~ it' a a long step £roa this level o:f analysis to
th• de£inition o:f apoci:fic tecoaaendation~ at a disaggr~gated level.
It'• one. !-hi.lg to aay. that th• price o:f rice ia low. quite another to-·:
say ~hat it ought to be, and auch aora ~i:f:fic:ult ta kno~ whether a
given pr~c• riea ia "appropriate" or "acceptable." It'a one thing to
d11acrib•- a. tari:f:f atructure with inappropriats -incentives; another-- : ·
. a~d. very di:f:farent t!\ing--to invent a technically and politica'lly
_acceptable alternative. Econo•iata are good at th• £irat set o:f
prool•••· not ao good at th• aecond.
One ataf£ coaaent on th• Kenya experience undersc:or~• thia •
problea:
Failur• to :fully anticipate iapleaentation problaaa ate~• :froa inau:f:ficient knowledge o:f govarnaent procadurea and inau:f£iciant underatanding o:f bureaucratic procedu~ea.Finally, expari•nce with th• Kanya cperation reveal• th•
. need to work out ac:tion plana in great.er detail".· The e-a·nk ata:f:f' a strength liea in a•••••ing developa•int ·problwaa and outlining general linaa o:f action to overcone them~ It i·a on l••• :fir• ground when it coaea to apprai11ing and prograaaing the apeci:fic actiona that:. are r•qui'red to· iapleaent th••·
'
I Pag• ~8 I
!!orecw•r, e1':£act1v• •onitoring of th• •any cov•nJnt~ in th•
a~nda:;d SAl. cou.ld be virtually all-abaor:..!.ng, •v•1'1 il r•atrictod ' I
I •
tho~• tan"gible c:on.ditiona that have: ao'Jl• quantitative! baa,ia. Th• I I
~ituat:.ion j s_alaaya -:hanging ao :f'aa:t--.:ertainly :f'aatet th.an can be
to
:f.o.llow•d-£ro11 far awl:ly. Pric•a are, riaing and fell1nf at di:f'f'erent
r4t~•: p~liti<:al. t'lnd securit~ cond1,tion.1; ar• aubJ•Ct to r·apid change:
aoa• .tapo~tant :fac~ors will chang• 'befcre the SAl. inkl i.s dry. It ia I
hard tc. ae-111 how Senk tachniciana aon.•.toring an SAl. cal't at.ay -rn ·t:ouch
i with th••• changea. I"~~
I
- ~~ £act, the conc•ption, •~•gotiation and aonitor~ng o:f pol1cy -I
c:onditi~na -~•aancia auch •xtraordin~ry capecit1••• if tt 1•• ·t:o- be' done
: _ w££~iv~.ly, t.hat en• haa to wor.d•r wt:•ther acarc1t·y , £ nucti- akil"la • i
, . I
d~••n't-••"'•rely limit the volui.e o:f policy-baaed l•nfiin~J the Sank--
, I
For ~hat ia involved i•i ia1••naely More I
deaanding th1:1n putting t.ogeth•r ro4d or pow•r proJ•ctr, <lr even
~'!11 _develeipaeot. proJacta. It i.a • alao aucn aore ~~alancting ·than: :~-~ I
I
The IMF ata:f£ have .s: aorle bounded pol-icy I
-:.-.c--ar~na: :t::iey :£ocaa on a ••all nuabeJ;: 0£ well-defined Jerfor•a-nce . !
I
: ~ -- crit~ia:. ~hey have w•ll-worn pat.ha tC'J follo,.. in ter~a o:f data n•eda-,-1 ..
i
. __ :. -. procec;!ur~a.. e ,i)eCtationa 0£ local p•ople. Th• i•pli~ation is ·clear: I I
-. progreaa will hav• been aa~1• toward• ao•• othar·a. So those who aee: ·
_cupa a·a hal£-eapty can beaoem failure, while th"cae .who :aee t.hea aa
: hal:C:-~~l:l can weight th• latter targeta heavily and c:laillt a\.l.c:Ceaa.
•
•
Page 43
And the entirely obJ&<:tive outaide evaluator would be hard-pressed to·
argue. that any one weighting syatea was superior t.o all• oth.ers. given
the Sank'• general ObJectiVGJ. Finally. given the diff~renced that
exiat in county circuaatancas. a decision about weighting £or one
co~ntry i• unlikely to be o:f 11.uch help when choosing the wt1ightin9
aystaa £or even th• country next door.
Fifth, aa noted earlier. the 11.onitcrs and aivaluators ~:i:ll have 6n
interaat in th• perpetuation 0£. t.he SAL.. There is. conaequentl y. a
atro!lg ~andency on both aides to accentuate the.positive:- So even
~•re l~tt.le ha• c:hanged, aany of the Bank at.a£:£ ~ill tend to point -
to. recant aigna 0::£ prcgraaa, to iaainent breakthrough•.: - -·· - . -- - . - - -
ra~piant. country a1niat.ara will raport·how thet"r·recalcitrarit
colieaguea are "nov beginning to aove in the right.direction'". -·In:::.-
aaJ'ly caaea the Bank repcrta that "Govarnaent haa agreed"" to raviae x· or increase Y. - Six acntha later the agreeaent in prin~iple aay·
' -reaa.1~, b~t action 1• still :fcrthcoaing. The pdrtiea ~an attl1 aay z.
' t...1'\at th• re:fora in question i• underway, though d•layeC:S. ': 7 •
' . Finally. and along the aaae lines. there are alao~t t1lweya ways ·
to -JU&ti:f.y non-perioraanca on ncn-invidioua grounda. The lli1ri:fc:ireeaerit · - - ·
o:f SAL. ccnd1tional.1t.y ia even aora aubJact to the kinda 0£ ao:ftaning·
propenait1•• that one writer recently attributed· "l::o Fund ·
12 conditionality.
I£ the ceilipgs Con governaent spending er de£icita on credi ':. growth> are not observed. the iae11ber under:tak1a.S not tc aak• :fur-Uer dra:fts on standby credit without periaisaion · of the IMF. Thia aounda tough. The catch, howev,a:I:'. ia
:- :.
that. per11isaicn appears always to b•r :forthcoaing. ~~r• ------~_:__ __ ---· are alway a explanations• e-nd th• explanation• are aC:1c:aptad • and aaauranc:e. that new aeaaurea being taken will pr•v•nt ·• z·ec:urrenc:fl! are accepted • - - - ..
Page 44
Non-credibilitY of the Deterrent - ··-----· --- __:.. __ - ·--'-·---;;..·
Ad_d•d to the near-iapoaai_bility of ObJective 111onit.or!ng and ths
•a•• of positive perfor•ance evaluationa, there ia ~he non-
cr~dibili~Y. of th• deterrent. A• noted earlier the Bank auat afiriri~
fro• the ulti•ate aanction, cancellation. Caaaation of dia~urae~~nia =- '.'""-;..;.-=-·
~·coo strong a.r••ponae by th• Bank to banal acta of non-
p•rforaanc•· In the one caae where it waa dona <Senegal> the SAL·w~a = ·~ - .;. :. .:. . ·. - :. ~ - ... ~ :'
: 'uaua-lly- ieaa credible than in progr-s11 lendinq: e road pro3ec:t can't be at.opped in •idat.reaa becau-•• 0£ nqnper:!oraance on a poli.cy condition. Another cited the caae of the Ivory Coaat, Wh•2~• all riceralated agricultursl proJecta were foundering bec:auae o:E Gc>vernm11ant--a -h•a1.tanc:y to raiai&• rice prices. Witll SAL•, rice pricea: ha"• been raiaed thr•a ti•••·
2. A. Horberger. •ua1ng the Resources at Hand More E~:f-~tively." A•eric:an Economic Review, May 19~9. Harvey Leibenatein ~as not yat b•en able to perauade the ec:ono•ic:a pro:feaa1on that x-1ne:f:fic:ienc:ies ar1se :fro• :factor• other than managerial inadequacy.
3. Pierre M. Landell-Milla. "Structural AdJu•t•ene ten~ing:-"Early l'!xperienc:e," Finance end Dev&lop111ent. Oec:ew.ber, 1981. p.: 17. ~--
~. Ibid •• p. 18.
'5. Fred M. Vinaon,. "A:fter the Savann'1h Con:farenc:e."·fo~eign-A:f:fair§.~ var.- z-4·-'-cJ'Uiy 1946>,. P. 626.
6. Several o:f the early loan• requir•d uae o:f aoae-o:f tih• £ore1gn' axchan·ge_ and aoae o-1 th• counterpart funda £or· pcirt~cu14r purpoa9s. : - - - -Thi.• reatric:tiv• practice waa al:)andon'9d in July 1981. ' : - : ~ - : ~ - ~ =
I
7. The "aynergiaa"" pr••i•• aaaerta ttiat changing two pchici•• · togather will tiring greater total ben19:f1ta than:i:f the two change•'-~'·-= are aada elone.
I
8 • . Stanley P 1.-eae,. T.....,h..,.e..._.H ... o-...b_,b_,l"""ia""d.._..,G..,i..,a..,n~t..,..::....__E"'-=a""a::.::• .... v ... a=-_,,o ... n..._t.....,h"'e ........ w ... o ... r.....,.l..,d._.B ... a""""'n...,k._.. lileatv-iew Pr•••· Boulder 1984. '
1.0.. In a 1968 article on e .. mditiona1: aaaiatanc:e Albert! H!rachaan -and:· Rich.rd Bird c:oaaent. on thia general :iaaue: .... .<the :faet that aid i• . . . I I
knoYn- t.o. be available i:f certain poli,ci•• are :followed 'l'ill aoaeti••a &erve to at.rengt.hen a doaeatic: group :genuinely arid inde,end.eritly " - · co~-vi..nc:ed o:f th• correctn••• o:f the•-! polic:i•• ·and it i• there:fore:; ~ - ·. not :inc:cnc:ei.vabl• that aid wi.11 on 09c:aaicn help the grci>up c:car to~ pow•r •••• CButl at. beat,. aituationa ;in which aid helpa 1 vir·tue :.•.o >: · triuaph in thia :faahion are the exce~tion rather than th• -r·ule. ·rhe -ncraaJ. c:aae i• :far acre prcaaic:: th-! kn~wledga that aid i•~ avai.l,,ble : 1:f c:ertain polic.1e• •r• adopted aerv-!• to 11.ake th••"I poiici.e• Mora· attractive and l•- coatly than they :would .ctherwi•• be~ 1'h••• polJ..ciaa will there£o~~ c:ften be adc~ted by aid-hungry gcvernaenta=rn :. apite o:f c:ontinu.ing doubt• c:f the pc~ic:y-aakera theaaelY••, · - · .: r••i•tanc:• :froa ao•• quarter• wi.thin 1th• goverri••nt,. on.!alaught againat the 'deal' :£roa the cppoaitidn, and general diataate :for the
• . I
whole procedure... Albert. O. Hirachaan and Richard Bird'; Fc1reign Aid-.;. A CFftfcjUir §Dd a Propoatl, InternatiJnal Finance .. Sec:tioti-.- -t>opartaent..- -o:f Eeonoaica,. Princ•ton Univeraity,. Eaaaya in Interna~ipnal Finaric:e; #69, J'.uly 1969,. P• 9. '
13. In on• SAL. country, negotieition• on th• agie•••nt ~•re well-· advanced when a local o££icial, attending a •••ting called to dia~uac th• dra£t agr••••nt, expr••••d hie ainiatry•a opposition to one c1£ th• beia1c propoaala--in thi• inatance, th• ultiiaate aboliti6n 0£ pan-
- t~:":"ritorial pricing £or :f'ar• outp•.1t.!i and input••• Th• c££j,cieil in -que~tion waa two or thr•• level• down in th• hierarchy, but waa in the.key i•pl•••nting •iniatry <Agriculture>. Yet this opposition had not b••n expr••••d until late in the nogoti3tion proceaa. rn the event thia led to change in ~~~ SAL. terms.
•
TABLE l SALs,. l980~April. 1984:
by Count·~, Amountf and Repayinent Tems
" Term~ o! Loan Repayme.aj;_ -+ -
I ,. - - Fis~1 Yaar~-~=Country Amount Length Grace ·Int:erest - and -~pproval (in u.s. '!ears Period Rate _q,"!_;e $.millions) I
'lfl.al:'S ' -- ··----·-.+-·---- -----
1980 I -··- I
Mar Ks:nya. 55 (IDA) -- :
Mqr ·Turki:ti" 200 17: 4 8.25\ Jun · · -Boliv~.a Sil 20: s - .. -· - 8.25
I ~wnbe~ ot; Millions ·~f Dollars'.',. j . '1·, EUl\,MID-EA$T ,~ N. AFR , : Sf.L.' fi: Total IDA M'R
''
305
7 . 717
6 1070.7
1284.7
5 705.9
(55)
(38)
(80)
(110)
(SS)
1 55
30 ·120
1 150
2. 170.9
3 345.7
ASIA
l 200
• 3 540
2 477.8
1 300
1 I I'
WEST.HEM.
1 50
1 22
1 76.2
1 60.2
1 60.2
' .
1 200
2 375
1 304.5
2 575.8
- N"Wiiber-1 - -- 20- - - - 10 I - ----.,-
0Ue6 ~517.8
,5 - 6 268,6 1455.J Amounts 4083.J (338)
I ! ~ . ' I . ' i ' i I i ' I ' ' ' ; ' ' I ' I
a fifst number, length of lQan. Second number, length of grac;e .period. . ,
I ,
I LI
Terms Len,gth I Grace~,
15-3 17-4 20-5
1 25!'
·l 275
1 200
3 390
1 120
3 2~ 530.7 290
2 3f 361 608.
2 2 ~160.2 290. 7
T - -n 10 8~5.2 1772.4 1345.~
b In the length-grace division the third loan to Kenya· is on standard IDA terms. c, .$P million of the $22 m Guyana SAL was a credit on standard IDA terms. d 1.JP.O million of the $140 m Pakistani SAL wa11 a credit on stan4ard IDA ter~s. , i
e,. lo the geographic division, the -6tl) loan to Yugoslavia is fo.r. $275 m. In the length-9r1,"~" ~ivisiqn,, the 6th loan, to Togo, for $40 m is on IDA terms. Both Yugoslavia and the Togo loans al'."'! included
• 1 .. in the Ul54 m total. f 11 ,.$70,m of the 130.9 Kenya II SAL was a credit on staqdard ID~ 1 ~qr~q. 9 , IO J;.he len9th-grace div~~ion th~ .f.}fth lqll~ !.~ to·'Ofllawl on !J·tandard IDA ter~s •,
I ,, I
• • •
" '
I. f ·1 I' . I I I'
'1u I 11 · t
Income Group J• I ,j I ' ,
' ., Dase4 on . lP82 GNP .
per Capita (U.6. Dollars)
I ($410 or leas)
II ($411-805)
III ($806-1410)
IV ($1411-2UO)
V (over $2440)
Total New1
Active Totals
Per Capital' 1982 GNP of New SAL countries a . ' Unwpighted av. i .
Av. weighted by 19821ro~ulati~ns1,·
I I 'I.!
•• t .,
I I I !
TABLE 3 New SAL Countries, by Income Category anc\ by Fiscal Year,