Argentina: SAP and Financial Crash

Paper Summary:

The author argues that the Argentinian financial crash was, primarily, the outcome of poorly designed and carelessly implemented IMF and World Bank Structural Adjustment Policies. This argument is supported through reference to economic facts and statistics.

From the Paper:

"The 1990s witnessed several large-scale financial collapses in countries that applied the IMF structural adjustment programs. As the IMF structural adjustment programs are built upon solid economic rules and theory and revolve around the principle of economic liberalization and market capitalism as the engine for economic growth because hey encourage local investment and establish motivations for foreign investments, this is very ironic. It is more even more ironic when the rationale behind these structural adjustment programs was stability and growth not instability and crash. Consequently, this irony has aroused the concern of many economists, all the more so because a financial collapse in one country influences the economies of others and will continue to do so on a larger and wider scale as globalization expands. Among the economists who have demonstrated this concern and who have sought to contribute to our understanding of financial crashes is William Easterly, the author of "IMF and World Bank Structural Adjustment Programs and Poverty." As the title of the article illustrates, Easterly is concerned with the role that IMF and World Bank structural adjustment programs play in domestic economies and their effect on the conditions of the people living in those economies."

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