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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Political feasibility of structural adjustment in Africa: an application of SAM mixed multipliers
Authors:Rich, Karl M.
Winter-Nelson, AlexISNI
Nelson, Gerald C.ISNI
Year:1997
Periodical:World Development
Volume:25
Issue:12
Pages:2105-2114
Language:English
Geographic terms:Gambia
Cameroon
Madagascar
Subjects:economic policy
household income
External link:https://doi.org/10.1016/S0305-750X(97)00099-5
Abstract:The implementation of structural adjustment programmes (SAPs) has often been undermined by opposition from politically powerful groups who are favoured by existing policies. If SAPs are not politically sustainable, their economic merits may be irrelevant. This paper investigates the impact of structural adjustment packages on household incomes and determines whether SAPs can increase aggregate income without imposing high costs on political elites, using social accounting matrices (SAMs) from The Gambia, Cameroon and Madagascar. Two sets of policy experiments were run: a multiplier analysis to assess the strength of linkages within the economy and a series of simulations representing past SAPs. The results indicate that the extent to which increased income in rural sectors can provide multiplier gains to urban groups varies substantially across the countries. The presence of a rural elite or strong farm-nonfarm linkages can enhance the political sustainability of SAPs. In addition, political sustainability is very sensitive to the design and effects of a SAP. Slight changes in the balance between demand constraint and supply promotion or in the output response to reform can have large effects on the SAP's impact on the income of politically powerful groups. Bibliogr., notes, ref., sum.
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