Adrian Hewitt

The effectiveness of structural adjustment lending: Initial evidence from Malawi

Abstract The World Banks new programs of structural adjustment lending are likely to prove most effective with those governments which demonstrate shared ideals in their approach to economic adjustment and policy reform. Malawi has long been regarded as a country placing great reliance on the market in resource allocation, showing restraint in public sector expansion and retaining a strong export orientation. The balance-of-payments difficulties and the deterioration in economic circumstances which began in 1980 did not arise solely from “external shocks,” but the structural adjustment lending programs introduced in 1981 as a means of easing the painful reform process found root in a fertile and responsive policy environment. This paper chronicles the first two SALs to Malawi, reviewing in particular the specific policy reforms advocated and required by the Bank, the extent of their implementation and the provisional effects on the Malawi economy.

Stabex and commodity export compensation schemes: Prospects for globalization

Abstract The Stabex scheme has for a decade been internal to the EEC-ACP cooperation arrangements. It has transferred about ECU 1 billion to 48 ACP countries, though with heavy concentration on a few. Designed to address fluctuations in individual commodity earnings (now exclusively agricultural exports), it differs from the IMF scheme for compensatory finance which uses broader trade aggregates. The paper assesses the performance of Stabex to date and considers proposals for alternative or complementary schemes which draw on features of Stabex and the CFF. No other donor has yet replicated Stabex and the current climate for globalization of a scheme of commodity-based concessionary transfers is not bright, but a modest extension of the EECs own scheme to some non-ACP least developed countries is imminent.

The 1975 and 1997 White Papers compared: enriched vision, depleted policies?

The 1997 White Paper on international development is the first such policy statement since 1975. Comparison of the two thus gives us an opportunity for assessing how official thinking and politics in the UK have responded to the many changes that have occurred in the meantime. This article first compares the views of the two papers on the nature of development and of the poverty problem; and then compares the treatment of EC|EU issues. Neither Paper was just about aid. We conclude that WP75 appears comparatively narrow in focus and unsophisticated in its appreciation of the problems addressed, but is better at taking a strategic view and more forthcoming about specifics. What WP97 gains in the breadth and sophistication of its appreciation of problems it loses in detachment from reality and retreat from specifics. Its treatment of EU issues is surprisingly laconic. But overall WP97-in its various forms-is more accessible and decidedly more populist. It has already been disseminated to a far wider audience than WP75 ever reached. Its success is in simplifying a world which development officials know has grown more complex; its failing is that they seem unsure about specifically how their influence and modest resources can best be applied to improving it.

Stabex: An evalution of the economic impact over the first five years

Abstract The shortfall in funding to meet current claims on the EECs export earnings stabilization scheme (Stabex) has diverted attention from the operations of the scheme and its merits and shortcomings in providing developing countries with compensatory finance. This paper takes a sample of 10 ACP recipients of Stabex, which together drew over half (

A Role for Compensatory Finance in the 21st Century after the 2008 Global Financial Crisis

200m) of the Stabex transfers under Lome I and evaluates the stabilization effects of the transfers at macroeconomic and sectoral level. It concludes that Stabex has proved to be a useful balance-of-payments support mechanism, albeit inequality distributed due to quirks in its rules of operation, although it was designed as a scheme to support smallholder export crop producers. In the light of this evidence, the future form of Stabex under a re-negotiated Lome Convention is considered.

European Aid Donors

International or inter-regional compensatory finance was briefly a fashionable instrument in the relationship between developed and developing countries in the 1970s and 1980s, during the previous surge in commodity power. But, instead of becoming established as a settled adjustment mechanism with some permanence, either endowed with adequate funding or modelled as a self-financing mechanism in a post-Keynesian world, the schemes (STABEX, the Compensatory Financing Facility (CFF), SYSMIN, COMPEX, FLEX and the CCFF) were used by industrialized countries as a calming mechanism and an antidote to the Common Fund which, at the time, was seen as threatening over-regulation of commodity markets and, eventually, rigid supply management.

World commodity prices: still a problem for developing countries?

The real value of official development assistance (oda) from the industrialised countries has been pitifully low during the UN’s ‘Second Development Decade’. Oda disbursements net of amortisation but not interest from the 17 member countries of the OECD Development Assistance Committee (DAC) increased in 1970 dollar prices to about

The New European Trade Preferences: Does 'Everything But Arms' (EBA) Help the Poor?

7.19 billion,1 compared with the 1970 disbursement of

Understanding European community Aid : Aid policies, management and distribution explained

6.81 billion. As a share of donor GNP, however, disbursements from DAC member states have fallen from 0.42 per cent in the mid-1960s to 0.34 per cent in 1970 and 0.31 per cent in 1977. Since the beginning of the Second Development Decade, the overall contribution of these donors has never exceeded half of the 0.7 per cent target. This average figure, it is true, masks an exceptional effort by some European countries, three of whom have achieved the UN target. Also, some oil-producing nations have allocated far larger shares of their GNP to aid funds than any of the traditional donors, and in many of the DAC member countries non-official aid raised and channelled by private voluntary organisations has progressed remarkably. Nevertheless the overall picture is of highly concessional transfers for development purposes being barely maintained in terms of real value and becoming proportionately less significant than other forms of resource transfer. This paper concentrates on the overall volume of aid disbursed by European members of DAC over the last decade and analyses the content of the aid by comparing the various policies on terms, country allocation and procurement-tying.