Structural Adjustment and Structural Transformation in Sub-Saharan Africa
. . . it would be extremely helpful if those who deal in the language of economic development could find a way to ease the term "structural adjustment" out of common usage. It is a misleading term because it implies a one-time set of changes with a one-time result. . . . In fact, what is at issue is general economic policy. True "adjustment" is in fact an ongoing process of framing good policies, . . . more rational decision making procedures and strengthened policy making institutions. In this sense, poor countries, like rich ones, are never beyond adjustment ( Berg 1989: 28).
Economists define the process of economic development as combining growth (rising income or GNP per capita) and structural transformation (change in the productive structure of the economy). This development objective, embodying growth with structural transformation of the economy, was the one adopted by almost every African government following independence. In virtually every instance it was pursued through a program of import substitution industrialization led by direct state investment in the productive sectors, particularly in modern manufacturing. The results of this development strategy have been disappointing and, coupled with adverse external circumstances in the 1970s and 1980s, have necessitated structural adjustment reforms.
Why? To understand the causal process and historical circumstances, I
Stephen O'Brien is Chief Economist, Africa Region, the World Bank. He was educated in the Economics Dept., Stanford University, and has taught at Williams College, the University of California at Berkeley, Stanford, and the Institute of Administration of the University of Ife, Nigeria. He has 17 years of experience working in Africa for the Bank: as a Country Economist for Ethiopia and Tanzania, a Senior Economist supervising economic work on Kenya, Uganda, Sudan, Zambia, Zimbabwe, and Malawi, and the Chief Economist of the West Africa Region of the Bank. Currently, he is Chief Economist of the Africa Region.