Structural adjustment and the African crisis : a theoretical appraisal

Since the early 1980s, the economic policy and development debate in Sub-Saharan Africa has been singularly dominated by structural adjustment programmes (SAPs) which have been part of the conditionality tied to donor assistance. The debate concerning the appropriateness of SAPs for SSA countries continues to be unabated despite nearly two decades of 'adjustments’. Towards this main objective, the paper is structured as follows. In Section ll, we shall examine the methodological and theoretical foundations of adjustment. This will be presented at three levels, i.e. an examination of: i) methodological sub-components of neo-classical economics; ii) intermediate propositions arising from the sub-components which are embedded in the theories; and iii) theories underlying adjustment as a reflection of these methodological foundations and intermediate propositions. In Section III we shall advance our case that SAPs based on this narrow foundation of neo-classical economics fail to embrace the complex issues involving structural transformation · in Africa. The section starts with a brief discussion of the inconsistencies in the theories underlying adjustment and the structural features of African economies, which are not adequately addressed by SAPs. We shall then show how SAPs are incapable of dealing with the exigencies of African development. Section IV first lists major developmental issues, which are central to effecting institutional and structural transformation in Africa. We shall then begin to outline a theory of dynamic, structural and institutional embeddedness as an alternative framework, which could explicitly treat development as a process of structural and institutional transformation. We shall conclude our discussion with a new policy and research agenda for African Development.