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Back | Programme Area: The Social Effects of Globalization

Conference Report: Adjustment, Globalization and Social Development

Report of the UNRISD/UNDP International Seminar on Economic Restructuring and Social Policy, New York

On 11-13 January 1995, over 200 representatives of governments, NGOs, international agencies and the research community met in New York at a seminar on Economic Restructuring and Social Policy to discuss issues of social protection and solidarity in the context of a rapidly changing global economic environment. The seminar, designed to provide input into the preparatory process for the World Summit for Social Development, was organized by the United Nations Research Institute for Social Development (UNRISD) in co-operation with the United Nations Development Programme (UNDP), and was co-sponsored by the European Centre for Social Welfare Policy and Research. This report highlights some of the principal discussions and conclusions of the meeting.

Over the last 20 years, there has been a remarkable convergence of approaches to economic and social policy throughout the world. The emphasis has been on market liberalization, privatization, reduction in government expenditures, including social services, and the withdrawal of state intervention from certain sectors of the economy. This report discusses some of the consequences of the standard structural adjustment model. In many cases, the impacts on the most vulnerable social groups have been severe, with the incomes of the poor being reduced and the number of people living in poverty increasing.

The adjustment model assumed that these "transitional costs" would be relatively short-term, and that the poor could be protected from their worst effects. However, this assumption has not been borne out. Moreover, the economic growth that was supposed to follow adjustment measures has in many cases failed to materialize. In other cases, growth was fragile and highly speculative. In fact, the conventional adjustment model emphasizes demand suppression, rather than production increase, to restore economic equilibrium, and thus sustained growth is far from automatic.

But participants also argued that economic growth was not sufficient for social development: many social problems are in fact correlated with rapid growth. This does not imply that growth is unnecessary or undesirable, but it does indicate that explicit mechanisms need to be put in place to influence the type and the distribution of growth that occur.

The report calls for rethinking structural adjustment. The standard approaches to adjustment emphasize macro-economic restructuring, but there are in fact a range of other structural aspects of society that should be adjusted as well. Structural adjustment should address questions of the distribution of resources, assets, employment and earned income. It should pay attention to social policies that contribute to human security, stimulate the growth of skills and ensure equitable returns to productive activities.

Rethinking adjustment to bring it into line with the requirements of social development will entail redefining the priorities of adjustment, designing more effective monitoring mechanisms, and increasing the accountability of the market to the state and the state to the people. It will require working out new institutional arrangements that make adjustment measures more efficient and equitable by promoting positive-sum economic and social interactions, rather than accentuating the destructive zero-sum tendencies of the market. It will involve co-ordinating social policy reforms with economic policy reforms so that both will promote the ultimate goal of social development.

This is not to say that the problems of social policy reform will be easily solved. The crisis of the welfare state in many industrialized countries implies that new models for social policy must be found to address the needs of developing countries. The increasing interdependence among the world's economies forecloses some social policy options, but it also opens up new opportunities for globally co-ordinated social development strategies based on an understanding of the need for international solidarity.

The summary report is followed by the text of the opening address to the seminar, given by Rafeeuddin Ahmed, Associate Administrator of UNDP, and by reflections on the seminar prepared by Paul Streeten, Professor Emeritus, Boston University.
  • Publication and ordering details
  • Pub. Date: 1 Jan 1995
    Pub. Place: Geneva
    ISSN: 1020-1092
    From: UNRISD