Ghana: The Political Economy of Recovery
The Rawlings structural adjustment, the reference case for African reform.
Summary
The reference has not verified this book in detail; the summary states only what the title, author and subject establish.
Rothchild edited this volume of studies on Ghana's economic recovery programme, published in 1991. The reference has not verified the individual contributions.
The context is specific. Ghana at independence in 1957 was among the wealthiest countries in sub-Saharan Africa, with substantial cocoa export earnings and reserves. Over the following twenty-five years its economy contracted severely: cocoa production collapsed as producer prices were held far below world levels by the marketing board, which taxed farmers heavily; the currency became massively overvalued; smuggling and parallel markets replaced formal trade; infrastructure decayed; and by the early 1980s output per head had fallen substantially with severe shortages.
The Economic Recovery Programme launched in 1983 under Jerry Rawlings, with World Bank and International Monetary Fund support, is the volume's subject. Its components included large devaluation, which restored producer prices for cocoa; removal of price controls; reduction of the fiscal deficit; divestiture of state enterprises; and infrastructure investment funded by aid. Growth resumed and the programme was presented internationally as a success.
The questions the contributions examine include whether the recovery was sustainable or dependent on aid inflows, whether the gains were distributed or concentrated, the political conditions that allowed an authoritarian government to impose adjustment that elected governments could not, the effect on urban populations who lost subsidies, and whether the reforms addressed the underlying institutional problems.
The volume is from 1991 and Ghana's subsequent record has included both continued growth and repeated fiscal and currency crises. Readers should treat it as an assessment of the programme's early years.
Key takeaways 7
- Ghana was among sub-Saharan Africa's wealthiest countries at independence and its economy contracted severely over the following twenty-five years.
- Holding cocoa producer prices far below world levels through the marketing board destroyed the country's main export industry.
- An overvalued currency combined with price controls pushed trade into smuggling and parallel markets.
- The 1983 recovery programme's central measure was a large devaluation that restored producer prices for cocoa.
- An authoritarian government imposed adjustment that elected governments had been unable to sustain.
- Urban populations who lost subsidies bore the immediate costs while rural producers gained.
- Whether the recovery was sustainable or dependent on continued aid inflows was the open question at the time of writing.
Who should read it
Analysts of African structural adjustment who want the Ghanaian case studied in its early years, supplemented with later assessments.
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