This Working Paper is one of a series of draft chapters of a book currently under preparation with the provisional title of The Adaptive Economy; Adjustment Policies in Low-income Countries. The purpose of this volume will be to discuss general principles of policies for what has become known as 'structural adjustment' and to set these in the context of longer-term economic development. Those who make or seek to influence policy are the chief target audience, although it is hoped that this work will also be useful for students and other members of the academic community.