Ghana and South Korea: Lessons from world bank case studies

Abstract

AbstractIn 1957, Ghana and South Korea had about the same annual per capita GDP. Thirty years later, South Korea's annual purchasing power per head was about 10 times that of Ghana's for reasons explained by World Bank case studies. Ghana's economic retrogression stemmed from allowing hyperinflation, over‐regulation, production disincentives, institutional demoralization, and deterioration of human services. Since 1983, Ghana has embarked upon an Economic Recovery Programme, including realistic exchange rates, decontrol of prices, and administrative reforms. While this programme has led to real GDP growth, Ghana remains dependent upon the international price of cocoa and foreign aid.Under President Park, beginning in the mid‐1960s, South Korea successfully introduced an export‐oriented economy by developing export pride, national leadership, market sustaining incentives, labour incentives, research, and technical education. While both Ghana and South Korea have used state‐owned enterprises, only South Korea has done so successfully, with a Performance Evaluation System. This system can be introduced elsewhere with sufficient political will to overcome inevitable problems and opposition.