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Political Economy of Structural Adjustment: A General Equilibirum- Interest Group Perspective

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  • Roe, Terry L.

Abstract

Economic policy, policy reform and sustainability are viewed as a political- collective action process. The challenge is to provide incentives for collective action that yield an efficient allocation of a country's resources and to prevent the reemergence of the old policy regime once a crises is resolved. A modified Ricardo-Viner model with rent seeking households is used to provide insights into the factors that cause action to be misdirected, and into how policy reform might be induced and sustained. The analysis suggests the use of instruments that decrease the scope for rent seeking, provide resources - in the form of public goods - to the less influential, and compensatory payments to those disadvantaged by reform. Several recent IBRD and IMF country programs include these types of payments.

Suggested Citation

  • Roe, Terry L., 1992. "Political Economy of Structural Adjustment: A General Equilibirum- Interest Group Perspective," Bulletins 7467, University of Minnesota, Economic Development Center.
    • Handle: RePEc:ags:umedbu:7467
    DOI: 10.22004/ag.econ.7467
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    References listed on IDEAS

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    Cited by:

    1. Richard Adams, 1998. "The political economy of the food subsidy system in Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 35(1), pages 66-88.

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