Exploring the role of structural adjustment in alleviating poverty in Pakistan

While the structural adjustment approach has been guiding the orientation of International Financial Institutions (IFIs), namely the International Monetary Institute and the World Bank's, approaches to poverty reduction in much of the developing world, the evidence that it actually brings about poverty reduction remains controversial. Such debate provides the premise for this background paper which will examine the specific relationship between the structural adjustment mechanism and poverty alleviation. Since IFIs use structural adjustment in most parts of the 'developing' world, this paper begins by examining the literature more generally to see how this mechanism has been used by the IFIs to address the problem of poverty in an international context. Then a conceptual background for the case study is provided to introduce the history of structural adjustment in Pakistan. In particular, the ways in which the mechanism has proposed to deal with the prevailing poverty in the country will be identified. Governmental approaches to poverty alleviation before the introduction of structural adjustment in Pakistan will be mentioned to accentuate the IFI influence in dealing with this problem. Thereafter, the background paper considers the implementation hurdles, accomplishments, failures and tensions in the ongoing implementation of structural adjustment leading up to formulation of the Pakistan Government's Poverty Reduction Strategy Paper. The paper concludes by highlighting the need for infusing participation within the IFIs approach towards poverty alleviation in developing countries like Pakistan.