Abstract
This study has utilized an analytical framework which, by focusing on strategic interaction and bargaining, examines the two major economic crises facing Third World states in the 1980s and continuing into the 1990s: economic adjustment and debt management. In contrast to most other studies, this one considers these economic crises as two sides of the same coin; one that I have characterized as indebted development. Nearly all debtor regimes are faced with the near impossible task of accumulating scarce resources and of distributing funds in sufficient quantities in an attempt to satisfy domestic constituents (via economic adjustment strategies) and foreign financial interests (via debt management strategies). The state, considered from this two-sided perspective, stands at the center of a very difficult and controversial relationship with domestic and foreign groups.
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NOTES
J. B. Zulu and S. M. Nsolui, Adjustment Programs in Africa. Occasional Paper 34 (Washington, D.C.: International Monetary Fund, 1985); Miles Kahler, ‘Orthodoxy and Its Alternatives: Explaining Approaches to Stabilization and Adjustment,’ in Joan M. Nelson, ed., Economic Crisis and Policy Choice: The Politics of Adjustment in the Third World (Princeton: Princeton University Press, 1990).
Stephan Haggard, ‘The Politics of Adjustment: Lessons from the IMF’s Extended Fund Facility,’ in Miles Kahler, ed., Politics of International Debt (Ithaca, N.Y.: Cornell University Press, 1986); Joan Nelson, ‘The Political Economy of Stabilization: Commitment, Capacity, and Public Response,’ World Development 12:10 (October 1984); Karen Remmer, ‘The Politics of Economic Stabilization: IMF Standby Programs in Latin America, 1954–1984,’ Comparative Politics 19:1 (October 1986).
See the chapters in Bonnie K. Campbell, ed., Political Dimensions of the International Debt Crisis (New York: St. Martin’s Press, 1989) and Bonnie K. Campbell and John Loxley, eds., Structural Adjustment in Africa (New York: St. Martin’s Press, 1989).
Ishrat Husain and Ishac Diwan, eds., Dealing with the Debt Crisis (Washington, D.C.: World Bank, 1989).
The Cartegena Conferences, followed by initiatives by Nigeria, Peru, and Brazil, often constituted the focus of this research.
Charles Lipson, ‘Bankers’ Dilemmas: Private Cooperation in Rescheduling Sovereign Debts,’ World Politics 38:1 (October 1985).
Miles Kahler, ‘External Influence, Conditionality, and the Politics of Adjustment,’ unpublished paper, 1990.
For debtors, see Stephan Haggard and Robert Kaufman, ‘The Politics of Stabilization and Structural Adjustment,’ in Jeffrey Sachs, ed., Developing Country Debt and the World Economy (Chicago: University of Chicago Press, 1989); Thomas Callaghy, ‘Toward State Capability and Embedded Liberalism in the Third World: Lessons for Adjustment,’ in Joan M. Nelson, ed., Fragile Coalitions: The Politics of Economic Adjustment (New Brunswick: Transaction Books, 1989). For creditors, see Graham Bird, Commercial Bank Lending and Third World Debt (New York: St. Martin’s Press, 1989); Paul Mosley, Conditionality as Bargaining Process: Structural Adjustment Lending, 1980–86. Essays in International Finance 168 (Princeton University, 1987); Robert Devlin, Debt and Crisis in Latin America: The Supply Side of the Story (Princeton: Princeton University Press, 1989); Benjamin J. Cohen, Developing-Country Debt: A Middle Way. Essays in International Finance 173 (Princeton University, 1989).
On the IMF bargaining position, see Kendall W. Stiles, Negotiating Debt: The IMF Lending Process (Boulder: Westview Press, 1991); on the commercial banks position, see Bird, Commercial Bank Lending and Third World Debt, on the debtors’ bargaining stance, see Haggard and Kaufman, ‘The Politics of Stabilization and Structural Adjustment;’ and on the various bargaining positions of commercial banks and creditor governments, see Matthew Martin, The CrumblingFacade of African Debt Negotiations (London: Macmillan, 1991).
Callaghy, ‘Toward State Capability and Embedded Liberalism in the Third World: Lessons for Adjustment;’; Stephany Griffith-Jones, `Debt Crisis Management: An Analytical Framework,’ in Stephany Griffith-Jones, ed. Managing World Debt (New York: St. Martin’s Press, 1988); Paul Mosely, Jane Harrigan, and John Toye, Aid and Power: The World Bank and Policy-based Lending, Vol. 1 (London: Routledge, 1991); Haggard and Kaufman, ‘The Politics of Stabilization and Structural Adjustment.’
Robert Putnam, ‘Diplomacy and Domestic Politics: The Logic of Two-Level Games,’ International Organization 42 (Summer 1988).
Daniel Druckman, ‘Boundary Role Conflict: Negotiation as Dual Responsiveness,’ in I. William Zartman, ed., The Negotiation Process: Theories and Applications (Beverly Hills: Sage Publications, 1977), p. 88.
Callaghy, ‘Toward State Capability and Embedded Liberalism in the Third World: Lessons for Adjustment,’ p. 120.
Callaghy, ibid., p. 116; Thomas J. Biersteker, ‘Reducing the Role of the State in the Economy: A Conceptual Exploration of IMF and World Bank Prescriptions,’ International Studies Quarterly 34:4 (December 1990), p. 477.
Several observers are critical of Zimbabwe’s shift toward economic liberalization. Colin Stoneman, in particular, argues that, given Zimbabwe’s economic success, there was no need to change strategy. He asserts that ‘it may thus be one of history’s ironies that the African country which best showed the vialbe alternative to World Bank structural adjustment policies, itself embraced them just before they became widely discredited.’ See Stoneman, ‘The Impending Failure of Structural Adjustment: Lessons from Zimbabwe,’ paper presented at the Canadian Association of African Studies (May 1990), p. 6. Since my interpretation of Zimbabwe’s adjustment strategy is found in Chapter Three, I shall only argue that the country’s economic condition was far more serious than Stoneman’s analysis. Despite the widely known negative consequences of economic adjustment programmes, Zimbabwe’s Five-Year Economic Reform Programme incorporates many components of the state’s earlier ‘home-grown’ liberalization strategy. For arguments similar to Stoneman’s, see his ‘Zimbabwe Opens Up to the Market,’ Africa Recovery 4 October-December, 1990 and Roger C. Riddell, ‘Zimbabwe,’ in Roger C. Riddell, ed., Manufacturing Africa: Performance and Prospects of Seven Countries in Sub-Saharan Africa (London: James Currey, 1990).
Martin, The Crumbling Facade of African Debt Negotiations, p. 320.
Kahler, ‘External Influence, Conditionality, and the Politics of Adjustment;’ and Mosley, Harrigan, and Toye, Aid and Power: The World Bank and Policy-based Lending, Vol. 1.
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© 1993 Howard P. Lehman
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Lehman, H.P. (1993). Conclusions: The Process of Indebted Development. In: Indebted Development. International Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-22731-0_6
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