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Structural Adjustment in Lesotho: An Evaluation

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dc.contributor.authorFoulo, Taboen
dc.contributor.authorGrafton, R. Quentinen
dc.date.accessioned2026-01-01T13:40:56Z
dc.date.available2026-01-01T13:40:56Z
dc.date.issued1998en
dc.description.abstractThis paper evaluates the 1988-90 structural adjustment program in Lesotho using a computable general equilibrium model. It finds that the program failed to rectify a balance of payments problem, and that without a massive inflow of capital for a water project the country would be facing a major balance of payments crisis. Lesotho's experience suggests that structural adjustment need not work against the poor, and that the balance of payments objective may be achieved by reducing recurrent government expenditures, other than wages.en
dc.description.sponsorshipBefore analyzing the SAP in Lesotho, however, it is necessary to describe the Lesotho Highlands Water Project (LHWP)—an important capital project financed by the Republic of South Africa (RSA). This project, which will continue until 2020, involves the building of six dams, water transfer tunnels, and the construction of a hydropower plant to deliver water to the RSA. South Africa will be responsible for all costs of those parts of the project related to the transfer of water including implementing, operating, and maintaining the scheme. Lesotho will be responsible for the financing of the hydropower component of the project. From Lesotho’s point of view all monies received for the water-transfer component of the project are grants. Table 2 indicates the size of these grants or foreign exchange inflows, which by 1990 represented almost 20 percent of the GNP and had a significant and positive impact on its balance of payments. 4 4 The highlands water project provides an important but temporary positive terms-of-trade shock to Lesotho, and its effects, therefore, should be separated from those generated by the SAP.en
dc.description.statusPeer-revieweden
dc.format.extent24en
dc.identifier.issn0161-8938en
dc.identifier.otherORCID:/0000-0002-0048-9083/work/162952920en
dc.identifier.scopus0039505986en
dc.identifier.urihttps://hdl.handle.net/1885/733800546
dc.language.isoenen
dc.sourceJournal of Policy Modelingen
dc.titleStructural Adjustment in Lesotho: An Evaluationen
dc.typeJournal articleen
dspace.entity.typePublicationen
local.bibliographicCitation.lastpage814en
local.bibliographicCitation.startpage791en
local.contributor.affiliationFoulo, Tabo; Central Bank of Lesothoen
local.contributor.affiliationGrafton, R. Quentin; Arndt-Corden Department of Economics, Crawford School of Public Policy, ANU College of Law, Governance and Policy, The Australian National Universityen
local.identifier.citationvolume20en
local.identifier.doi10.1016/s0161-8938(97)00098-7en
local.identifier.pure8517f8aa-a2d5-49a4-b68f-c192fbd58089en
local.identifier.urlhttps://www.scopus.com/pages/publications/0039505986en
local.type.statusPublisheden

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