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Structural Adjustment, Policy and Administrative Reforms The Impact of International Reforms
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Policy Reform The Current State of Management of Policy Reform and Structural Adjustment a. IMF stabilization and trade liberalization b. Currency reform, auctions- end of subsidies (end urban privileges)
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Policy Reform c. Market prices for agriculture and industrial goods d. Deregulate the economy e. Most Importantly: Free Trade f. Administrative Reform: Privatization
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Policy Reform-Conditionality Conditionality- World Bank and UNDP and the "Management" Team of Resident Ambassadors SAPs- Focus on Policy and Administrative Reforms in return for loan restructuring and foreign aid
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Structural Adjustment Problem of debt: Considered a Third World Problem: Jamaica- #1 a. Donor monies drive the system in the degenerated state b. Reagan and Thatcher c. 1991- End of Cold War and Dismantling of the Soviet Union
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Structural Adjustment Second World as new debtors- Chad vs. Russia a. Transitional States-Hungary vs. Mongolia b. Rise of Asia and trade blocks c. Crisis in Asia and their return to debt management
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Policy Reforms- Issues 1. Opposing views of many UNDP Representatives (The role of the Resident and Country Plans) 2. The receivership committee: Resident Rep., World Bank Representative and the IMF delegate resident ambassadors 3. Structural Adjustment State looks like colonial antecedents.
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Administrative Reforms The New Orthodoxy
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Administrative Reforms Stabilization and Conditionality Requirements Public Sector Reform
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Administrative Reforms Reform of the bureaucracy a. Cutback the civil service the infamous 19% first cut b. Individual Consultants and Contractors work with investments and the service/commercial sector
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Administrative Reforms 1. Strategic Planning and Management 2. Deregulation 3. Performance Management 4. Merit Recruitment 5. Decentralization and Development of Local Government
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Administrative Reforms 5. End of Corruption 6. “Reinventing Government”- end to hierarchy and intra- governmental competition 7. Rewards based on Performance
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Administrative Reforms Problems with Administrative Reform 1. Departments buy and sell goods & services- statistics or setting up “privatization networks” to acquire state properties. 2.Sub-economic salaries: offices, houses and telephones- buying soap and selling chickens. International salaries for essential workers (Consulting Practices)
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Administrative Reforms- Problems 3. Reality- The absence of recurrent budgets 4. Activity (economy) driven by technical assistance projects the only game in town 5. NGOs and for profit contractors and consulting firms take the jobs
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Privatization Key Conditionality- Privatization of the economy 1. Bridging and sectoral loans and grants major source of international involvement- Conditioned on privatization
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Privatization Forms of Privatization a. divestiture b. contracting out c. liquidation d. sell off public private partnership shares
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Privatization e. International conditions for "good" remaining bureaucrats, eg. World Bank Programs- special salaries for those on contract with the project f. Goal: Return to the recurrent budgeting process and balanced budget principles of “Neo-Orthodox Economists” so called PUBLIC CHOICE THEORY g. Public-Private Partnerships- NGOs, Business and a streamlined state
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