The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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The recent wave of democratization in developing countries and in formerly communist ones has sparked renewed interest in the relation between politics and economic adjustment. Adjustment programs, however well designed in a technical economic sense, are often politically difficult to launch and, once launched, to keep afloat. Success in implementing an adjustment program may depend on a government's skill in generating political support and holding off the opposition. This article explores the politics of economic reform, drawing on country studies by political scientists and country specialists, the growing theoretical literature by economists, and the findings of a World Bank research project on the political economy of adjustment in new democracies. The article examines three broad clusters of variables: institutional characteristics of the political system, aspects of the internal and external economy, and the design of the reform program. It also considers the relevance of political analysis for policymakers and for international financial institutions.

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