Structural Adjustment and the Welfare of Rural Smallholders : A Comparative Analysis from Sub-Saharan Africa

The direction and level of changes in real incomes brought about by structural adjustment are determined by a variety of factors, including sources of income, patterns of expenditures, and movements in relative prices in the wake of adjustment. An econometric model is used to derive an index of real income, which is employed for data from Cote d'Ivoire, Ghana, Malawi, Madagascar, and Tanzania. No systematic changes in relative prices, and especially in the ratio of tradable to nontradable prices, were noted after the beginning of adjustment, although the diversity of income sources implies that the implications of movements in relative prices on smallholder welfare are indeed complex. The results indicate that there is no unequivaocal pattern of increase or decline in the real welfare of the rural poor but that there are marked differences among countries and regions