What is structural adjustment?
Structural adjustment is the rather bland name given to the package of austerity policies that the IMF and World Bank require an indebted country government to adopt when it is forced to turn to them for financing. The institutions have stopped using the term in most cases (see note below on PRSPs), but it is still the most widely used label for the damaging macroeconomic “reforms” the IMF and World Bank insist on from virtually every country that gets a “policy-based” loan. Loans from the World Bank for infrastructure projects generally do not come with such wide-ranging conditions attached. Other names for these policies are “the Washington consensus,” and, in a more general sense, “neoliberal.” The basic package of policies that constitute most structural adjustment programs has changed little since the late 1970s, when the term was first coined. The package became more sweeping and standardized with the Latin American debt crisis of the early 1980s, when Mexico, followed by other c
