5. The package of conditions l
5. The package of conditions linked to loans to developingcountries to promote market-oriented economic reform is called…
A) Structural adjustment
B) Throughput
C) Dematerialization
D) Entropy
E) Technological lock-in
6. Which one of the following is not a negative environmentaleffect of structural adjustment?
A) Increased consumption of resources
B) Greater pollution pressures
C) Reduced subsidies lead to increased rates of pesticideuse
D) Reduction in natural capital stocks
E) Weakening of environmental institutional capacity
7. Which one of the following statements best describes theWorld Bank’s environmental
record?
A) The World Bank has always taken leadership in protecting theenvironment
B) The World Bank considers that the environment is not relevantto its development mission
C) The World Bank has ignored critics of its environmentalpolice
D) The World Bank has responded to criticism by expanding itsenvironmental lending
E) The World Bank has recently been renamed as the World TradeOrganization to more accurately reflect its mission
8. Which one of the following statements is false?
A) The World Bank currently screens all projects for potentialenvironmental impacts
B) World Bank loans are often coupled with grants from otherorganizations
C) World Bank funding for environmental projects has steadilyincreased since 1994
D) World Bank projects include both a “brown” and a “green”agenda
E) World Bank loans must eventually be repaid
Answer:
5. (A) Structural Adjustment
Structural adjustment programmes(SAPs) consist of loans provided by theInternational Monetary Fund (IMF) and the World Bank (WB) tocountries that experienced economic crises.[1] The twoBretton Woods Institutions require borrowing countries to implementcertain policies in order to obtain new loans (or to lower interestrates on existing ones). The conditionality clauses attached to theloans have been criticized because of their effects on the socialsector.
SAPs are created with the goal of reducing the borrowingcountry’s fiscal imbalances in the short and medium term or inorder to adjust the economy to long-term growth. The bank fromwhich a borrowing country receives its loan depends upon the typeof necessity. The IMF usually implements stabilization policies andthe WB is in charge of adjustment measures.
SAPs are supposed to allow the economies of the developingcountries to become more market oriented. This then forces them toconcentrate more on trade and production so it can boost theireconomy. Through conditions, SAPs generally implement “free market”programmes and policy.
6. (B) Greater Pollution Pressures.
7. (A) The World Bank has always taken leadership in protectingthe environment
8. (B) World Bank loans are often coupled with grants from otherorganizations
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