Impact of Structural Adjustment on Sustainable Rural Livelihoods: A Review of the Literature

Abstract

This paper reviews the impact of structural adjustment on sustainability of rural livelihoods. It unpacks the elements of adjustment and looks at the effects of each of these on the quantity, quality and sustainability of rural livelihoods. There is no systematic improvement or decline in rural livelihoods as a result of adjustment measures. Changes in the relative prices of tradables and nontradables provided incentives and had a positive impact on rural livelihoods in some countries but failed to create sustainable incentive structures in others. By concentrating almost exclusively on the issues of pricing, the reform policies ignored the other critical factors, in particular, the technological development needed to translate improved incentives into more sustainable and productive farming systems.