Structural adjustment is a set of economic policy ideologies based in neoclassical assumptions of economic development.  These economic policies include reductions in governmental spending, privatization of the market, trade liberalization, devaluation of currency, the removal of marketing boards, and market deregulation.  The goal of these policies is to stimulate economic growth in a country by reducing governmental spending and waste and forcing the newly privatized market to become increasingly efficient, removing costs and waste, which will theoretically produce an economy that is overall more stable, efficient, and independent.  Critics of these ideologies contend that they are purely theoretical and when placed under the unstable, and sometimes irrational, circumstances of everyday life, will be fundamentally altered due to ever-changing factors. 

            Promoters of structural adjustment policies contend that these reforms - while having some negative short term effects - are essential to the implementation and growth of a free market economy.  Commonly citing public sector waste and misappropriation of funds, governmental corruption and fraud, overvalued currency propped up by strict price controls and market boards, and unfavorable terms of foreign trade as factors it means to address.  The assumption is that once a country purges itself of inefficient portions of the market being kept alive by governmental regulations and subsidies, focuses on the few industries where it maintains a competitive advantage, and allows terms of sale and trade to be implemented that will accentuate this advantage, economic growth will follow.  The primary example given for this process is that of the market boards and strict price controls in place on many agricultural markets throughout the 3rd world.  The thinking is that once the price controls are removed the market will open and the farmers will have the ability to seek the best price for their wares.  This, coupled with the devaluation of the currency, allows the farmers more economic security, leading them to increased investment and production.

            Structural adjustment detractors counter with a questioning of the theoretical basis of structural adjustment policy and economic theory, as well as with the numerous accounts of countries that have had mixed results, and the lack of any countries that have experienced a complete turnaround and a move towards modernization.  The most basic challenge made of the structural adjustment policies is that, being based in economics, the assumption is made that all humans are rational actors, engaging in a judgment and decision making process with all relevant information.  Essentially, while at the time of implementation these theories may have validity, their very implementation has changed the circumstances and factors, indicating the outcomes could be significantly different once these new factors, unknown at the time of initial implementation, come to light.  The theory does not take into account even the possibility of unknown factors or changes in the surrounding circumstances.

            The results have been mixed for the countries that have implemented structural adjustment policies, but have been somewhat constrained to the continent level, with Latin America, and to a certain extent Asia, being viewed somewhat as successes (by proponents of the model), whereas Africa has proved dismal for the majority of the countries that have implemented its policies.  Yet this is highly qualified as well, since even the 'successes' of Latin America have been tempered by continued revolutions, such as the move towards communism in Venezuela and the Zapatistas movement in Mexico. 

            Furthermore, the role of government in the economic development process was not theorized properly in the structural adjustment policies, which favored less and less governmental involvement, opening up the way for private firms and freedom from trade and market regulations.  This relationship was miscalculated, as there are numerous examples of the need for a governmental intervention in one or more of these areas.  Businesses will not open if there is not an infrastructure available to support it, making electricity, sewage, and transportation routes, along with basic governmental services such as a police department, all necessary for development.  Beyond this initial level the opening up of labor markets does not always produce the desired results, as these governments - who have been instructed to downsize - are pitted in trade competition with the strong central governments of the Western industrialized countries, which are not so constricted and will fiercely protect their own industries.  This argument also fails to take into account the inelasticity of demand for some products, indicating that, regardless of their output, demand will remain the same.  Furthermore deregulation of the labor market can have the opposite of its intended effect when firms drive their labor cost low enough to remove local demand for their products; which prices out their indigenous consumers.

            The moral argument against structural adjustment policies is the outcome of all these policies, which are aimed at long term economic development.  The removal of governmental protection, for both the labor and industrial markets, typically worsens the economic situation of individuals already living in conditions of squalor, with no silver bullet case that indicates this line of policy will work.  Furthermore, these countries are essentially forced into enacting policies that will lessen their sovereign governments' influence in favor of the wishes of the international capitalist elite and the 1st world, industrialized countries.  The interesting part is that while the governments of the 1st world are growing, with budgets in the trillions and 35 to over 50 percent tax rates, while maintaining the ability to place controls on their sovereign markets, they are promoting a set of ideologies aimed at removing governmental control and regulation and allowing private business to run the show.  Even the success stories, such as Mexico, are still in such disarray that the prospects for the future of these policies are under serious doubt.

            The situation this leaves us with is an ever-increasing economic disparity both inside of these countries and in the world as a whole.  The countries that benefit from these policies are the 1st world, Western, countries that are able to control the price of goods produced in the entire world, since they have advocated no government, while at the same time maintaining and growing their own governments.  This materializes in a cheap incoming flow of goods that the particular country does not have a competitive advantage in, and strict price and labor controls of the industries it does have a competitive advantage in, allowing the 1st world countries to not only set the terms of trade, but indicate what the items of trade will be as well since it will place restrictive tariffs on goods it deems need to be produced in-house.  A cynic could look at this system and say that the 1st world countries have developed a system in which they have a constant supply of cheap goods, and a constant demand for high priced weapons. 

There have been two worlds created.  One in which economic and social conditions are ever deteriorating, leaving them with a consistent internal struggle for power, a constant cry from the populations for reforms that will raise the quality of life, and a government that lacks the ability maintain even internal security, fearing that increasing governmental size will leave the much needed ‘aid’ from the West (EU, UN, World Bank, IMF) removed for breach of contrat.  This creates a set of countries perfectly aligned to have a constant demand for munitions, and the 5 permanent members of the UN Security Council, coincidentally the 5 largest arms dealers & staunch supporters of this line of policy, to fulfill that demand.  These are Britain, France, Russia, China, and the United States of America.