Costa Rica : the effects of structural adjustment measures on the poor, 1982-1990

Costa Rica"s structural adjustment program, though not perfect, has been one of if not the best managed and most consistent in the Western Hemisphere, and may represent the best available opportunity to analyze the effects of structural adjustment measures on the poor. According to this report, the process of structural adjustment in Costa Rica has not had disproportionately negative effects on the poor. Indeed, it is argued, the status of the poor has improved relative to other income groups as well as absolutely since economic recovery began in 1983 -- the first full year in which structural adjustment measures can be said to have affected the economy; this refutes the commonly voiced criticism that the disruptions caused by structural adjustment are inherently injurious to the poor in the short term. The negative effects on the poor which have been documented in other countries during structural adjustment may be attributable to other factors, or simply to misguided or botched programs. The report, which draws on some of the major studies of Costa Rican development during the 1980"s, is careful to note that, because of the methodological complexities mentioned above, establishing causal relationships between structural adjustment measures and poverty indicators is beyond the scope of current research. However, the report comes down firmly in favor of structural adjustment as a way to promote economic growth and reduce poverty in the long-term.