Liberalisation and poverty in Africa since 1990–Why is the operation of the ‘invisible hand’ uneven?

Abstract

AbstractThe dramatic reduction in poverty in Uganda and Ghana in the 1990s was derived largely from the liberalisation of the export price received by a labour‐intensive peasant export sector. Other African economies ought to be able to derive inspiration from this manifestation of the invisible hand, but can they? Several other African peasant export economies experienced price liberalisation during the structural adjustment period, but without experiencing anything like the same positive poverty reduction dynamic. Two reasons are fairly clear—liberalising countries varied in the extent to which they passed on higher export prices, and they also varied in the extent to which they impacted on dimensions of governance, especially the politics of market access, in the rest of the economy. The latter continues to be an important research frontier for future investigators. Copyright © 2009 John Wiley & Sons, Ltd.