Introduction: Democracy and Successful Adjustment

Abstract

In the period following 1975, all the countries that had opted for inwardlooking capitalist or socialist development strategies found themselves, as a result of the limitations of these strategies and the growing liberalization of markets, confronted with an economic and financial crisis. The progressive worsening of this crisis, in the context of the petroleum shocks of 1973 and 1979 and the recessions of 1974–75 and 1980–83, brought these countries face to face with the increasingly urgent need to instigate a process of economic adjustment. This process, which was defined notably by the authorities of the International Monetary Fund (IMF) and the signatories to the Washington Consensus (Williamson, 1993), involved the adoption and application of a consistent set of short-term (one to five years) stabilization measures (SMs) and long-term (over ten years)1 structural change measures (SCMs) aimed, on the one hand, at correcting macro-economic imbalances (inflation, balance of payments deficit, government budget deficit) and, on the other, at increasing the openness, liberalization and competitiveness of the national economy. This transition towards a new outward-looking development system, a condition judged to be indispensable for a sustained recovery of growth in the context of globalization, entailed major long-term economic costs, particularly for the social groups that benefited from the former inward-looking development strategy (civil servants, enterprises focused on the local market, recipients of state assistance programs, and so on) (Nelson, 1990b, 3–4).