The Origins of Structural Reform: Structural Adjustment, What and Where Did It Come From?

Abstract

The 1970s witnessed economic programs aimed to help governments refinance their debts owed to the American international banking system by ending the Bretton Woods system and the gold-dollar peg. These programs required debtor states to open up their markets and privatize state-owned companies, ultimately strengthening the power of international financial institutions and promoting a more neoliberal economic approach in many parts of the world. As part of these efforts, many laws restricting the private sector were repealed, government spending was curbed and refinanced through credit policy, trade restrictions were reduced, and the exchange rate was devalued. This period also saw the abolishment of collective labour rights, introducing or increasing subsidies for companies, and tax relief for these businesses with deregulated pricing policies. International financial institutions such as the World Bank and the International Monetary Fund advocated structural adjustment for developing countries to overcome economic distress. This chapter focuses on the origin of these policies.