Adjustment, economic liberalization and partnerships in Benin: An overview of issues and policy options

IMF and World Bank structural adjustment programs were substantially adopted in the Third World in the 1980s, particularly in Africa. While the major focus of these programs is the balance of payments, the policy instruments through which they are deployed revolve around the restriction of domestic demand, the promotion of the supply side of the economy, and, ultimately, the curtailment of the state planning and control system.; In the case of Benin, this country formally adopted adjustment in 1989, although the formal bargaining which led to the official agreement between the Benin government and the IMF and the World Bank dates back to 1982. Since 1982, a number of measures were suggested by the IMF and the World Bank which Benin had to meet to qualify for formal adjustment.; This research reveals that, given the economic and political conditions of Benin, the neo-orthodox adjustment which emphasizes the market mechanism, remains controversial. A more appropriate approach to the reform process would be public-private partnership arrangements, which focus on the complementarily between the state and the other actors of society including the private sector. Therefore, this study explores the potential of public-partnerships in Benin.; In terms of research design, the study stresses the organizational factors for effective public-private partnerships. More specifically, the research targets Benin's peak organizations such as the state, the country's business associations, labor unions and non-governmental organizations, and analyses their capacities to engage in bargaining over economic decision-making.; The findings suggest that partnership modes of bargaining are beginning to emerge in Benin. Social organizations such labor, business associations, and the NGOs have made some progress in this direction. However, the reforms of the state apparatus need to be accelerated. State reform has been mainly focus on short term outcomes, particularly those aimed at cutting government expenditures.; Because of the involvement of social groups in decision-making in Benin, many aspects of neo-orthodox adjustment, particularly in the areas of wages and employment have been postponed. Yet, donors continue to support the Benin adjustment programs. This committment may indicate donor willingness to loosen the reform conditionalities. In return, the influence of these social groups in public policy-making has created conditions for reducing waste and abuse in government, and, therefore, could guarantee a better use of domestic and foreign resources. Donors, particularly the World Bank, the USAID, and the United Nations Commission for Africa (UN/ECA), have recently emphasized popular participation on the reform process. As such, Benin's programs may represent a test for setting new guidelines for development assistance in the Third World, particularly in Africa.