Because for the structural adjustment act, the IMF ordered developing countries to reduce their social services spending and many of the social service become privatized, which means the social services like health care and electricity is sold to a private company and the government no longer owns those social service.

The Pros and Cons of Privatization:
The pros of social services being privatized
The cons of social services being privatized
- Less taxes to pay, the citizens of a country no longer have to pay for the social services from taxes.
- Private companies want to make profits so they raise the price of the social services, and people in developing countries are extremely poor and can not afford to pay for the services.
- Because of privatization, more companies opened up and the competitions between the companies cause the price of the services to be lower in order to attract consumers.
- Privatization many also cause monopoly and cause other companies to run out of business. Which result massive lay-offs.
-Government no longer has to pay massive amount for public services, therefore the government can raise fund to pay off debt fast.
- Government does not gain profits from the social services any more.
More information about privatization:


The most common social service that the IMF tell the government to privatize is water utilities. Water plays an important role in our life (it keeps us alive). However, when the water utilities become privatized, the price of water goes up and many poor people in developing countries can not pay for clean drinking water. And here is a case study about the privatization of water in Bolivia: