Public Expenditure Reform under Adjustment Lending. Lessons from World Bank Experiences

The World Bank has helped define expenditure reform in 83 countries from 1979 to 1994 through 219 operations. Refrom efforts, through conditions for loans and credits, have focused on reducing and restructuring capital expenditures, reducing subsidies, reforming public employment, cutting the public sector wage bill, emphasizing operations and maintenance of existing facilities, and increasing social sector spending. This paper examines the effectiveness of these conditions in bringing about expenditure reform.