Structural Adjustment and the African Crisis: A Theoretical Appraisal

This paper locates the chief culprit for the failure of structural adjustment in Africa at the conceptual level rather than the weak implementation capacity of African governments. The neo-classical economic microfoundations, associated intermediate propositions and theories underlying adjustment seriously mis-specify the nature of African economies. Policies are often in conflict due to the inconsistencies within the adjustment model. Despite its name the model excludes vital structural features of African economies. The reliance on neo-classical microfoundations in adjustment leads to a series of errors which preclude the generation of policy options that could significantly develop African countries. Drawing on institutional economic theory, the paper points to an alternative approach aimed at the structural and institutional transformation of African economies.