The Use of Compensation in Economic Adjustment Programmes

The author attempts to assess the relevance of compensation, a specific set of economic policies and political measures, by which governments try to ease political tensions arising from their stabilization and adjustment programs. When collecting certain controversial issues and reacting to them, the author aims at developing a conceptual framework for the explanation of diverse characteristics and patterns of compensation to be found in concrete economic reform episodes. The discussion addresses two main issues: (1) who are (or are to be) compensated; and (2) how are they compensated if economic stabilization and adjustment is to sustain.