World Bank Policy-Conditioned Loans: How Did They Work in Ghana in the 1980s?

Abstract

In early 1980, the World Bank added to its portfolio of lending instruments a new one — the ‘structural adjustment loan’ or SAL. The essential novelty of this instrument was that it combined quick-disbursing programme lending with explicit loan conditions requiring of the borrowing country internal policy changes, sometimes quite major changes. This new form of lending grew rapidly in the early 1980s, went through various refinements in mid-decade, and as a part of a broader category of loans called ‘adjustment lending’ still constituted between one-quarter and one-third of the Bank’s new lending at the end of the decade.