States completely rejects the idea that there is such a thing as ‘devel-
opment economics’.”^76 The premise that the economic policies valid
for rich countries were also valid for poor ones did a great deal to
advance the movement from the old development agenda toward a
new set of priorities.
The World Bank encapsulated this shift by describing the 1980s as a
period that “downplayed distribution and poverty and insisted on re-
establishing market mechanisms to promote economic growth.”^77
The priority of economic governance, according to a popular catch-
phrase, was “to get prices right.” This approach was incorporated
in the policies of the IMF and the World Bank, for whom the prime
responsibility of governments was to ensure that markets were propped
up by a sound macro-economic framework. Structural adjustment
programs, which were in effect monetarist recipes for the South,
pushed developing countries to adopt high interest rates in order to
curb inflation, to devalue their currencies to stimulate exports, and to
introduce rigorous budgetary measures to improve public finances.
Within this cocktail of prescriptions designed to stabilize the balance
of payments, the reduction of government expenditures was regarded
as especially warranted, on the grounds that markets were more
efficient than states in allocating resources. Accordingly, adjustment
policies often involved the deregulation of the price of goods and
services that had until then been publicly supported, and the priva-
tization of state-owned enterprises. Initially, these reforms were pre-
sented as transition measures on the road back to a financially sound
environment. Over time, however, they increasingly became under-
stood as elements of a “permanent discipline.”^78
In conjunction with structural adjustment, two other objectives
shaped the policies designed by the international institutions and the
governments of the developed countries in the 1980s and 1990s: trade
liberalization and the promotion of foreign direct investment. The
two objectives stemmed in fact from a common assumption, that
the opening of borders was good for development.
(^76) Toye,Dilemmas of Development, p. 94.
(^77) James D. Wolfensohn and Franc ̧ois Bourguignon,Development and Poverty
Reduction: Looking Back, Looking Ahead, Washington, DC, World Bank,
2004, p. 3.
(^78) Payne,The Global Politics of Unequal Development, p. 12.
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