Adopting Trade and Domestic Policy Reforms

Countries Adopting Trade and Domestic Policy Reforms, 1980–1996

Africa Latin America

Benin Malawi Argentina Honduras Burkina Faso Mali Bahamas Mexico Burundi Mauritania Barbados Nicaragua Cameroon Mauritius Belize Panama Central African Republic Mozambique Bolivia Paraguay Chad Niger Brazil Peru Congo Nigeria Chile Suriname Cote d’Ivoire Rwanda Colombia Trinidad Ethiopia Senegal Costa Rica Uruguay Gabon Sierra Leone Dominican Republic Venezuela The Gambia Tanzania Ecuador Ghana Togo El Salvador Guinea Uganda Guatemala Guinea-Bissau Zambia Guyana Kenya Zimbabwe Haiti Madagascar

Sources: World Bank 1994a; Thorp 1999.



Structural Adjustment and the Politics of Reform 147 P

er ce










1980 1985 1990 1995


Nontariff Barriers in Developing Countries (as a Percent of All Industry Categories)

1989–1994 1995–1998

Hong Kong, China 2.1 2.1 Indonesia 3.6 31.3 Korea 50.0 25.0 Malaysia 56.3 19.6 Singapore 1.0 2.1 Thailand 36.5 17.5 India 99.0 93.8 Nigeria 14.4 11.5 South Africa 36.5 8.3 Morocco 58.3 13.4 Turkey 5.2 19.8 Argentina 3.1 2.1 Brazil 16.5 21.6 Chile 5.2 5.2 Colombia 55.2 10.3 Mexico 27.8 13.4 Uruguay 32.3 0.0

Source: World Bank 2008.

FIGURE 7.1 Average Tariffs, Developing Countries

Source : World Bank 2008



148 CHAPTER 7 Trade and Development II: Economic Reform

to multinational corporations. They deregulated industries and reduced gov- ernment intervention in the financial system.

Structural adjustment programs had a dramatic impact on average incomes in the short run and the distribution of income in the long run. The crisis and the reforms brought about a sharp contraction of economic activity. Income fell sharply as a result. In Latin America, income fell by about 8 percent between 1981 and 1984. In sub-Saharan Africa, incomes fell, on average, by about 1.2 percent per year throughout the 1980s (Thorp 1999, 220; World Bank 1993).

The dismantling of ISI also redistributed income from the urban sector to agriculture and emerging export-oriented manufacturing industries. In The Gambia, producer prices on groundnuts tripled as a consequence of structural adjustment policies (Jabara 1994, 309). These policies hurt producers based in the import-competing sector, as well as those employed in the nontraded-goods sector. In The Gambia, for example, the government raised the price of petro- leum products, public transportation, water, electricity, and telecommunications in connection with structural adjustment (Jabara 1994, 309). In Guinea, the elimination of government rice subsidies doubled the price that households paid for rice, an important staple in their diets (Arulpragasam and Sahn 1994, 79).

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