Political economy of stabilization in small, low-income, trade-dependent nations

The study examines the factors affecting: (1) political leaders" commitment to stabilization programs; (2) governmental ability to implement stabilization measures; and (3) the responses of key interest groups and the public to those measures. The discussion is based on case studies of stabilization efforts in five small, highly trade-dependent countries (Ghana, Zambia, Kenya, Sri Lanka, and Jamaica). A subsidiary theme is the way in which the political economy of stabilization may differ in such countries, as compared to larger, semi-industrialized economies. The study also discusses the political implications of program design and of the attempted speed of stabilization, and sketches the tactics available to governments for managing political risk, including partial compensation, persuasion, diversion or obfuscation, and protest containment. Appended are a summary framework for assessing the political sustainability of stabilization efforts, brief sketches of the case studies examined, and a 27-item bibliography (1969-83). (Author abstract, modified)