Structural adjustment programmes and export supply response

Abstract

This paper analyses three aspects of the export supply response to structural adjustment programmes supported by the World Bank. First, have programmes improved programme countries' export performance relative to non-programme countries? Second, have programmes contributed to re-orientation of production and build up of supply capacity? Third, have programmes resulted in greater export diversification? These questions are addressed by employing both traditional and less common techniques in the context of the ‘before–after’, ‘with–without’ and an original extended version of the ‘modified control group’ approaches. The empirical findings in this paper suggest that, although structural adjustment programmes have the expected effects in the short to medium run, they have failed to generate an appropriate supply response which could underpin lasting export expansion and diversification. © 1998 John Wiley & Sons, Ltd.