Structural adjustment programmes have fundamentally affected the life chances of hundreds of millions of people in Third World countries over the past several decades. With the collapse of communism, they have begun to assume a central role in economic and social policy-making in Eastern Europe and the former Soviet Union as well. It is therefore impossible to discuss the three principal areas of concern of the World Summit for Social Development — poverty, unemployment and social disintegration in the 1990s — without reference to the current debate on the role of structural adjustment in worsening or alleviating these problems.

The purpose of this paper is to provide background for the debate. After considering what "adjustment" means, in general terms, the paper will highlight different approaches to adjustment problems. Then it will focus on the macro-social and macro-political effects of the particular form of structural adjustment — based upon promotion of radical free-market restructuring — which gained currency in conjunction with the debt crisis of the 1980s. And it will close with a series of suggestions for rethinking adjustment policy in the 1990s.