"This article provides an account of the European Union/International Monetary Fund (EU/IMF) financial stabilisation package in Latvia, drawing out its implications for learning-based models of governance and for the relationship between social policy and financial aid. It is argued that the country-specific social and economic context of financial assistance programmes critically influences governments' policy choices and hence the nature of the adjustment process. A case study of the Latvian assistance programme also reveals the role of social policy in the financial aid process, in particular in ameliorating some of the effects of structural adjustment packages. This study also considers shifts in the attitudes of the World Bank and IMF to social policy issues and the changing relationship between social policy and fiscal and macroeconomic policy in the EU. "

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