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Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Pro
fess
or T
ed M
igue
lD
epar
tmen
t of E
cono
mic
sU
nive
rsity
of C
alifo
rnia
, Ber
kele
y
Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Lect
ure
21 –
Apr
il 10
, 200
7
Eco
nom
ics
172:
Lec
ture
21
3
Eco
nom
ics
172:
Lec
ture
21
4
Out
line:
(1)
Bat
es (2
001)
on
agric
ultu
ral m
arke
ting
polic
ies
(2)
Eas
terly
(200
1) o
n st
ruct
ural
adj
ustm
ent
Eco
nom
ics
172:
Lec
ture
21
5
Agr
icul
tura
l mar
ketin
g in
col
onia
l Afri
ca
•A
gric
ultu
ral m
arke
ting
boar
ds c
an in
theo
ry in
sure
fa
rmer
s ag
ains
t pric
e flu
ctua
tions
, allo
w th
e go
vern
men
t to
inve
st in
new
tech
nolo
gies
, etc
.
Eco
nom
ics
172:
Lec
ture
21
6
Agr
icul
tura
l mar
ketin
g in
col
onia
l Afri
ca
•A
gric
ultu
ral m
arke
ting
boar
ds c
an in
theo
ry in
sure
fa
rmer
s ag
ains
t pric
e flu
ctua
tions
, allo
w th
e go
vern
men
t to
inve
st in
new
tech
nolo
gies
, etc
.
Eco
nom
ics
172:
Lec
ture
21
7
Agr
icul
tura
l mar
ketin
g in
col
onia
l Afri
ca
•H
owev
er, i
n pr
actic
e in
col
onia
l Afri
ca m
arke
ting
boar
d pr
ices
wer
e se
t far
bel
ow w
orld
pric
es, l
eadi
ng to
a
mas
sive
tran
sfer
of i
ncom
e fro
m A
frica
n fa
rmer
s to
E
urop
ean
empi
res,
par
ticul
arly
dur
ing
WW
II
Eco
nom
ics
172:
Lec
ture
21
8
Agr
icul
tura
l mar
ketin
g in
col
onia
l Afri
ca
•H
owev
er, i
n pr
actic
e in
col
onia
l Afri
ca m
arke
ting
boar
d pr
ices
wer
e se
t far
bel
ow w
orld
pric
es, l
eadi
ng to
a
mas
sive
tran
sfer
of i
ncom
e fro
m A
frica
n fa
rmer
s to
E
urop
ean
empi
res,
par
ticul
arly
dur
ing
WW
II
•P
ost-i
ndep
ende
nce
gove
rnm
ents
(afte
r aro
und
1960
in
mos
t cas
es) c
ontin
ued
the
polic
y of
“squ
eezi
ng”
peas
ant f
arm
ers
in o
rder
to b
enef
it ur
ban
resi
dent
s an
d bo
ost g
over
nmen
t rev
enue
Eco
nom
ics
172:
Lec
ture
21
9
Hig
h ta
xatio
n ra
tes
on A
frica
n fa
rmer
s
Cou
ntry
Cro
pY
ear
% o
f Wor
ld P
rice
Nig
eria
Pal
m o
il19
71-7
256
Nig
eria
Cot
ton
1972
-73
43N
iger
iaC
ocoa
1976
-77
66G
hana
Coc
oa19
6265
Sen
egal
Gro
undn
uts
1972
-73
30Ta
nzan
iaC
otto
n19
74-7
541
Tanz
ania
Cof
fee
1976
-77
46K
enya
Cof
fee
1975
-76
93 (e
stat
es)
Ken
yaC
offe
e19
75-7
664
(coo
pera
tives
)
Eco
nom
ics
172:
Lec
ture
21
10
Hig
h ta
xatio
n ra
tes
on A
frica
n fa
rmer
s
Cou
ntry
Cro
pY
ear
% o
f Wor
ld P
rice
Nig
eria
Pal
m o
il19
71-7
256
Nig
eria
Cot
ton
1972
-73
43N
iger
iaC
ocoa
1976
-77
66G
hana
Coc
oa19
6265
Sen
egal
Gro
undn
uts
1972
-73
30Ta
nzan
iaC
otto
n19
74-7
541
Tanz
ania
Cof
fee
1976
-77
46K
enya
Cof
fee
1975
-76
93 (e
stat
es)
Ken
yaC
offe
e19
75-7
664
(coo
pera
tives
)
Eco
nom
ics
172:
Lec
ture
21
11
Hig
h ta
xatio
n ra
tes
on A
frica
n fa
rmer
s
Cou
ntry
Cro
pY
ear
% o
f Wor
ld P
rice
Nig
eria
Pal
m o
il19
71-7
256
Nig
eria
Cot
ton
1972
-73
43N
iger
iaC
ocoa
1976
-77
66G
hana
Coc
oa19
6265
Sen
egal
Gro
undn
uts
1972
-73
30Ta
nzan
iaC
otto
n19
74-7
541
Tanz
ania
Cof
fee
1976
-77
46K
enya
Cof
fee
1975
-76
93 (e
stat
es)
Ken
yaC
offe
e19
75-7
664
(coo
pera
tives
)
Eco
nom
ics
172:
Lec
ture
21
12
Who
ben
efite
d fro
m m
arke
ting
boar
ds?
(1)
Cen
tral g
over
nmen
t rev
enue
cou
ld in
crea
se(2
)La
w e
nfor
cem
ent a
nd c
usto
ms
offic
ials
: brib
es
Eco
nom
ics
172:
Lec
ture
21
13
Who
ben
efite
d fro
m m
arke
ting
boar
ds?
(1)
Cen
tral g
over
nmen
t rev
enue
cou
ld in
crea
se(2
)La
w e
nfor
cem
ent a
nd c
usto
ms
offic
ials
: brib
es(3
)S
mug
gler
s an
d or
gani
zed
crim
e(4
)B
urea
ucra
ts w
orki
ng fo
r the
mar
ketin
g bo
ards
Eco
nom
ics
172:
Lec
ture
21
14
Who
ben
efite
d fro
m m
arke
ting
boar
ds?
(1)
Cen
tral g
over
nmen
t rev
enue
cou
ld in
crea
se(2
)La
w e
nfor
cem
ent a
nd c
usto
ms
offic
ials
: brib
es(3
)S
mug
gler
s an
d or
gani
zed
crim
e(4
)B
urea
ucra
ts w
orki
ng fo
r the
mar
ketin
g bo
ards
(5)
Urb
an re
side
nts
and
othe
r net
agr
icul
tura
l con
sum
ers
The
big
lose
rs fr
om th
e po
licy:
Afri
can
farm
ers
–th
e m
ajor
ity o
f the
pop
ulat
ion
in e
very
Afri
can
coun
try
Eco
nom
ics
172:
Lec
ture
21
15
Who
ben
efite
d fro
m m
arke
ting
boar
ds?
(1)
Cen
tral g
over
nmen
t rev
enue
cou
ld in
crea
se(2
)La
w e
nfor
cem
ent a
nd c
usto
ms
offic
ials
: brib
es(3
)S
mug
gler
s an
d or
gani
zed
crim
e(4
)B
urea
ucra
ts w
orki
ng fo
r the
mar
ketin
g bo
ards
(5)
Urb
an re
side
nts
and
othe
r net
agr
icul
tura
l con
sum
ers
The
big
lose
rs fr
om th
e po
licy:
Afri
can
farm
ers
–th
e m
ajor
ity o
f the
pop
ulat
ion
in e
very
Afri
can
coun
try
•A
gric
ultu
ral p
urch
ase
pric
es a
re o
ften
not s
et b
y m
arke
ts in
the
U.S
. eith
er: U
.S. f
arm
ers
rece
ive
huge
su
bsid
ies
(opp
osite
of p
olic
ies
Bat
es 1
981
desc
ribes
)
Eco
nom
ics
172:
Lec
ture
21
16
Urb
an v
ersu
s ru
ral p
oliti
cs
•Th
ere
is a
con
sens
us th
at m
ost A
frica
n le
ader
s fo
cuse
d on
urb
an p
oliti
cs ra
ther
than
rura
l con
trol
durin
g th
e po
stco
loni
al p
erio
d –
a co
ntin
uity
from
the
prec
olon
iala
nd c
olon
ial p
erio
ds (H
erbs
t200
0)
Eco
nom
ics
172:
Lec
ture
21
17
Urb
an v
ersu
s ru
ral p
oliti
cs
•Th
ere
is a
con
sens
us th
at m
ost A
frica
n le
ader
s fo
cuse
d on
urb
an p
oliti
cs ra
ther
than
rura
l con
trol
durin
g th
e po
stco
loni
al p
erio
d –
a co
ntin
uity
from
the
prec
olon
iala
nd c
olon
ial p
erio
ds (H
erbs
t200
0)
•Im
agin
e th
at th
e pr
obab
ility
of a
lead
er re
tain
ing
pow
er
is in
crea
sing
in b
oth
urba
n an
d ru
ral i
ncom
e, b
ut is
m
ore
sens
itive
to u
rban
inco
mes
:P
rob
(Ret
ain
Pow
er) =
F(Y
UR
BAN, Y
RU
RAL
)
whe
re th
e ch
ange
in th
e od
ds o
f ret
aini
ng p
ower
with
ur
ban
inco
me
is ∂
F/∂Y
UR
BAN
> ∂F
/∂Y R
UR
AL>
0
Eco
nom
ics
172:
Lec
ture
21
18
Eco
nom
ic c
risis
of t
he 1
970s
-198
0s
(1) P
uniti
vely
hig
h ra
tes
of ta
xatio
n on
agr
icul
tura
l pr
oduc
tion
(Bat
es 1
981)
fa
lling
pro
duct
ion
(due
to
stan
dard
sup
ply
effe
cts,
sm
uggl
ing)
fa
lling
reve
nues
Eco
nom
ics
172:
Lec
ture
21
19
Eco
nom
ic c
risis
of t
he 1
970s
-198
0s
(1) P
uniti
vely
hig
h ra
tes
of ta
xatio
n on
agr
icul
tura
l pr
oduc
tion
(Bat
es 1
981)
fa
lling
pro
duct
ion
(due
to
stan
dard
sup
ply
effe
cts,
sm
uggl
ing)
fa
lling
reve
nues
(2) C
hron
ic b
udge
tary
def
icits
(3) R
isin
g fo
reig
n de
bts
(4) H
igh
rate
s of
infla
tion
Eco
nom
ics
172:
Lec
ture
21
20
Eco
nom
ic c
risis
of t
he 1
970s
-198
0s
(1) P
uniti
vely
hig
h ra
tes
of ta
xatio
n on
agr
icul
tura
l pr
oduc
tion
(Bat
es 1
981)
fa
lling
pro
duct
ion
(due
to
stan
dard
sup
ply
effe
cts,
sm
uggl
ing)
fa
lling
reve
nues
(2) C
hron
ic b
udge
tary
def
icits
(3) R
isin
g fo
reig
n de
bts
(4) H
igh
rate
s of
infla
tion
(5) B
loat
ed s
tate
bur
eauc
racy
(6) I
neffi
cien
t sta
te in
dust
rial s
ecto
r(7
) Hig
h ta
riff r
ates
, ext
ensi
ve fo
reig
n ex
chan
ge c
ontro
ls
Eco
nom
ics
172:
Lec
ture
21
21
Inte
rnat
iona
l pol
icy
chan
ges
in th
e 19
80s
•In
tern
atio
nal d
onor
s, li
ke th
e W
orld
Ban
k an
d In
tern
atio
nal M
onet
ary
Fund
(the
“Bre
tton
Woo
ds
Inst
itutio
ns”)
beg
an im
posi
ng c
ondi
tiona
lity
on lo
ans,
in
the
form
of e
cono
mic
refo
rms.
The
idea
was
no
mor
e lo
ans
for c
ount
ries
purs
uing
bad
eco
nom
ic p
olic
ies
•Th
e pa
ckag
e of
refo
rms
they
adv
ocat
ed b
ecam
e kn
own
as s
truct
ural
adj
ustm
ent
Eco
nom
ics
172:
Lec
ture
21
22
Inte
rnat
iona
l pol
icy
chan
ges
in th
e 19
80s
•In
tern
atio
nal d
onor
s, li
ke th
e W
orld
Ban
k an
d In
tern
atio
nal M
onet
ary
Fund
(the
“Bre
tton
Woo
ds
Inst
itutio
ns”)
beg
an im
posi
ng c
ondi
tiona
lity
on lo
ans,
in
the
form
of e
cono
mic
refo
rms.
The
idea
was
no
mor
e lo
ans
for c
ount
ries
purs
uing
bad
eco
nom
ic p
olic
ies
•Th
e pa
ckag
e of
refo
rms
they
adv
ocat
ed b
ecam
e kn
own
as s
truct
ural
adj
ustm
ent
•Th
e de
bate
ove
r stru
ctur
al a
djus
tmen
t and
fore
ign
aid
polic
y m
ore
gene
rally
is o
ur n
ext f
ocus
Eco
nom
ics
172:
Lec
ture
21
23
The
Cas
e of
Gha
na in
the
1980
s-19
90s
Eco
nom
ics
172:
Lec
ture
21
24
Map
of A
frica
Eco
nom
ics
172:
Lec
ture
21
25
The
Cas
e of
Gha
na in
the
1980
s-19
90s
•S
truct
ural
adj
ustm
ent r
efor
ms
in G
hana
, 198
0s:
–A
gric
ultu
ral p
rice
cont
rols
redu
ced,
agr
icul
tura
l m
arke
ting
boar
ds g
radu
ally
dow
nsiz
ed o
r di
sban
ded
(incl
udin
g “C
ocob
od”)
–Fo
reig
n ex
chan
ge c
ontro
ls a
nd ta
riffs
redu
ced
–S
tate
bur
eauc
rats
and
indu
stria
l sec
tor w
orke
rs la
id
off,
stat
e en
terp
rises
dow
nsiz
ed o
r priv
atiz
ed
Eco
nom
ics
172:
Lec
ture
21
26
Stru
ctur
al A
djus
tmen
t Im
pact
s
•P
ossi
ble
bene
fits
of S
truct
ural
Adj
ustm
ent i
n G
hana
:–
Eco
nom
ic g
row
th in
crea
sed
(bec
omin
g sl
ight
ly
posi
tive,
1-2
% a
nnua
l per
cap
ita g
row
th).
Ave
rage
pe
r cap
ita g
row
th fr
om 1
961-
1983
was
-1.6
%–
Agr
icul
tura
l pro
duct
ion
bega
n gr
owin
g ag
ain
–Im
ports
and
exp
orts
(inc
ludi
ng in
agr
icul
ture
) gre
w,
e.g.
fres
h fru
it fo
r Eur
opea
n m
arke
ts–
Infla
tion
fell
to lo
w le
vels
–B
udge
t def
icits
redu
ced
–G
row
th in
“civ
il so
ciet
y”, c
ivic
org
aniz
atio
ns–
Pol
itica
l dem
ocra
tizat
ion
(may
not
be
caus
al)
Eco
nom
ics
172:
Lec
ture
21
27
Ber
ry (1
997)
on
agric
ultu
re in
cen
tral G
hana
•B
erry
stu
dies
the
Kum
awu
regi
on, i
n A
shan
ti te
rrito
ry
•D
id S
truct
ural
Adj
ustm
ent “
wor
k”in
Gha
na?
For
who
m?
Eco
nom
ics
172:
Lec
ture
21
28
Ber
ry (1
997)
on
agric
ultu
re in
cen
tral G
hana
•B
erry
stu
dies
the
Kum
awu
regi
on, i
n A
shan
ti te
rrito
ry
•D
id S
truct
ural
Adj
ustm
ent “
wor
k”in
Gha
na?
For
who
m?
(1) M
ore
expo
sure
to m
arke
t pric
e flu
ctua
tions
(2) L
ess
acce
ss to
form
al c
redi
t in
rura
l are
as
Eco
nom
ics
172:
Lec
ture
21
29
Ber
ry (1
997)
on
agric
ultu
re in
cen
tral G
hana
•B
erry
stu
dies
the
Kum
awu
regi
on, i
n A
shan
ti te
rrito
ry
•D
id S
truct
ural
Adj
ustm
ent “
wor
k”in
Gha
na?
For
who
m?
(1) M
ore
expo
sure
to m
arke
t pric
e flu
ctua
tions
(2) L
ess
acce
ss to
form
al c
redi
t in
rura
l are
as(3
) “La
nd p
rope
rty ri
ghts
”ref
orm
s la
rgel
y un
succ
essf
ul
Eco
nom
ics
172:
Lec
ture
21
30
Ber
ry (1
997)
on
agric
ultu
re in
cen
tral G
hana
•B
erry
stu
dies
the
Kum
awu
regi
on, i
n A
shan
ti te
rrito
ry
•D
id S
truct
ural
Adj
ustm
ent “
wor
k”in
Gha
na?
For
who
m?
(1) M
ore
expo
sure
to m
arke
t pric
e flu
ctua
tions
(2) L
ess
acce
ss to
form
al c
redi
t in
rura
l are
as(3
) “La
nd p
rope
rty ri
ghts
”ref
orm
s la
rgel
y un
succ
essf
ul
(4) E
cono
mic
gro
wth
stil
l neg
ativ
e on
the
cont
inen
t as
a w
hole
(the
refo
rms
can’
t be
*tha
t* s
ucce
ssfu
l)(5
) An
assa
ult o
n na
tiona
l sov
erei
gnty
?
Eco
nom
ics
172:
Lec
ture
21
31
Eas
terly
(200
1) o
n fa
iled
refo
rms
in A
frica
•C
ount
ries
rece
ived
doz
ens
of lo
ans
with
out a
ctua
lly
impl
emen
ting
any
refo
rms
(e.g
., Za
mbi
a, Iv
ory
Coa
st)
--A
frica
n co
untri
es re
ceiv
ed 6
IMF
Stru
ctur
al
Adj
ustm
ent l
oans
on
aver
age
in th
e 19
80s
Eco
nom
ics
172:
Lec
ture
21
32
Map
of A
frica
Eco
nom
ics
172:
Lec
ture
21
33
•C
ount
ries
rece
ived
doz
ens
of lo
ans
with
out a
ctua
lly
impl
emen
ting
any
refo
rms
(e.g
., Za
mbi
a, Iv
ory
Coa
st)
--A
frica
n co
untri
es re
ceiv
ed 6
IMF
Stru
ctur
al
Adj
ustm
ent l
oans
on
aver
age
in th
e 19
80s
•Le
nder
s (li
ke th
e W
orld
Ban
k) h
ave
ince
ntiv
es to
mak
e la
rge
loan
s, b
ut fe
w in
cent
ives
to c
arry
out
ser
ious
ev
alua
tions
of t
heir
prog
ram
s
Eas
terly
(200
1) o
n fa
iled
refo
rms
in A
frica
Eco
nom
ics
172:
Lec
ture
21
34
•C
ount
ries
rece
ived
doz
ens
of lo
ans
with
out a
ctua
lly
impl
emen
ting
any
refo
rms
(e.g
., Za
mbi
a, Iv
ory
Coa
st)
--A
frica
n co
untri
es re
ceiv
ed 6
IMF
Stru
ctur
al
Adj
ustm
ent l
oans
on
aver
age
in th
e 19
80s
•Le
nder
s (li
ke th
e W
orld
Ban
k) h
ave
ince
ntiv
es to
mak
e la
rge
loan
s, b
ut fe
w in
cent
ives
to c
arry
out
ser
ious
ev
alua
tions
of t
heir
prog
ram
s
•Th
ere
is b
asic
ally
no
cros
s-co
untry
em
piric
al e
vide
nce
that
incr
ease
d fo
reig
n ai
d im
prov
es e
cono
mic
pe
rform
ance
in le
ss d
evel
oped
cou
ntrie
s (d
espi
te
clai
ms
by J
eff S
achs
)
Eas
terly
(200
1) o
n fa
iled
refo
rms
in A
frica
Eco
nom
ics
172:
Lec
ture
21
35
•In
fact
fore
ign
aid
may
hav
e ne
gativ
e ef
fect
s on
ec
onom
ic p
olic
y, lo
cal p
oliti
cs, a
nd u
ltim
atel
y gr
owth
in
the
long
-run
:
“Ove
r tim
e, fo
reig
n ai
d al
so c
ontri
bute
s to
wea
k st
ates
. R
athe
r tha
n de
velo
ping
dom
estic
ally
orie
nted
in
stitu
tions
, Afri
ca’s
sta
te o
ffici
als
orie
nt th
eir a
ctio
ns
exte
rnal
ly. …
Wes
tern
aid
is s
omet
imes
thou
ght o
f as
a re
stor
ativ
e re
spon
se to
col
onia
lism
and
the
slav
e tra
de. H
owev
er, A
frica
’s h
igh
leve
ls o
f OD
A [o
vers
eas
deve
lopm
ent a
ssis
tanc
e] h
ad e
ffect
ivel
y ex
tend
ed
colo
nial
pat
tern
s of
gov
erna
nce.
” (pa
ge 3
0)
Leon
ard
and
Stra
uss
(200
3) o
n de
bt a
nd a
id
Eco
nom
ics
172:
Lec
ture
21
36
•Fo
r nex
t tim
e: c
ontin
ue re
adin
gs fr
om w
eeks
12-
13
Eco
nom
ics
172:
Lec
ture
21
37
Whi
tebo
ard
#1
Eco
nom
ics
172:
Lec
ture
21
38
Whi
tebo
ard
#2
Eco
nom
ics
172:
Lec
ture
21
39
Whi
tebo
ard
#3
Eco
nom
ics
172:
Lec
ture
21
40
Whi
tebo
ard
#4
Eco
nom
ics
172:
Lec
ture
21
41
Whi
tebo
ard
#5
Eco
nom
ics
172:
Lec
ture
21
42
Map
of A
frica
Eco
nom
ics
172:
Lec
ture
21
43
Map
of A
frica