A Quantitative Appraisal of Adjustment Lending

Bela Balassa


This paper presents a quantitative analysis of adjustment
programmes. This is done by charting changes in various performance
indicators fonowing the receipt of the first adjustment loan, and by
further contrasting the results with those for the comparator group of
countries that did not receive adjustment loans. h is found that the
average decline in the GOP growth rate in the loan-recipient countries
was less than in the comparator groups. Similar results were obtained in
regard to per capita GOP. At the same time, in both cases, a majority of
loan-recipient countries experienced an improvement in their relative
position vis-d-vis the nonrecipient s. It is further apparent that the
loan-recipient countries made an adjustment effort in the period
following the fIrst loan. To begin with, economic expansion was
concentrated in the traded goods sectors, industry and agriculture, both
of which experienced an improvement in the loan-recipient countries
relative to the comparator groups. Also, the growth of consumption
declined substantially in absolute terms as well as relative to the
non-recipient countries. In turn, an acceleration is observed in the
growth of investment that holds the promise for future economic

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DOI: https://doi.org/10.30541/v28i2pp.73-94


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