This paper analyses the causes of success or failure of adjustment programmes, using a new database on 220 reform programmes. We find that the success or failure of reform depends on domestic political-economy forces. A few donor-effort variables are also highly correlated with the probability...

In the 1980s development assistance shifted largely from financing investments (such as roads and dams) to promoting policy reform. This change came because of a growing awareness that developing countries were held back more by poor policies than by a lack of finance for investment. After...

A few political economy variables can successfully predict the outcome of an adjustment loan 75 percent of the time. To select promising candidates for adjustment, the World Bank must do a better job of understanding which environments are promising for reform and which are not. Being more...