Question

5. The package of conditions linked to loans to developing countries 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 environmental effect of structural adjustment?

A) Increased consumption of resources

B) Greater pollution pressures

C) Reduced subsidies lead to increased rates of pesticide use

D) Reduction in natural capital stocks

E) Weakening of environmental institutional capacity

7. Which one of the following statements best describes the World Bank’s environmental

record?

A) The World Bank has always taken leadership in protecting the environment

B) The World Bank considers that the environment is not relevant to its development mission

C) The World Bank has ignored critics of its environmental police

D) The World Bank has responded to criticism by expanding its environmental lending

E) The World Bank has recently been renamed as the World Trade Organization to more accurately reflect its mission

8. Which one of the following statements is false?

A) The World Bank currently screens all projects for potential environmental impacts

B) World Bank loans are often coupled with grants from other organizations

C) World Bank funding for environmental projects has steadily increased since 1994

D) World Bank projects include both a “brown” and a “green” agenda

E) World Bank loans must eventually be repaid

Answer 1

5. (A) Structural Adjustment

Structural adjustment programmes (SAPs) consist of loans provided by the International Monetary Fund (IMF) and the World Bank (WB) to countries that experienced economic crises.^[1] The two Bretton Woods Institutions require borrowing countries to implement certain policies in order to obtain new loans (or to lower interest rates on existing ones). The conditionality clauses attached to the loans have been criticized because of their effects on the social sector.

SAPs are created with the goal of reducing the borrowing country's fiscal imbalances in the short and medium term or in order to adjust the economy to long-term growth. The bank from which a borrowing country receives its loan depends upon the type of necessity. The IMF usually implements stabilization policies and the WB is in charge of adjustment measures.

SAPs are supposed to allow the economies of the developing countries to become more market oriented. This then forces them to concentrate more on trade and production so it can boost their economy. 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 protecting the environment

8. (B) World Bank loans are often coupled with grants from other organizations