Structural Adjustment Programs and Economic Stabilization in Central America

Abstract

Four broad themes emerged from the discussions during the seminar on structural adjustment and stabilization in Central America : a) the need for a general equilibrium analysis in economic and sociopolitical terms; b) the contribution of external financial flows to the attainment (or not) of stabilization, structural adjustment, growth, and development objectives; c) the appropriate development strategy with exports as an engine of economic development, and the balance between international and domestic markets in that context; and d) the importance of democracy as a facilitator of economic adjustment. In summary, the need for economic general equilibrium analysis cannot be emphasized enough. But it should be placed in the context of the overall sociopolitical framework for the same reasons that economic general equilibrium analysis is to be preferred to partial approaches. Important links and feedbacks may otherwise be overlooked.