National poverty and the ‘vampire state’ in Ghana: A review article

Abstract

The appearance of the first two syntheses of the literature on the economic failure of ‘statist’ policies in post-colonial Ghana, to 1983, and the subsequent economic liberalization, is an opportune moment at which to consider the state of the debate about the political economy of the country since independence. This has focused on the nature of the socially optimum combination of administrative and market methods of resource allocation in this ‘test-case’ economy, and about the political conditions which largely determine the extent to which it is achieved. Explicitly or implicitly, both Frimpong-Ansah's (1991) and Rimmer's (1992) books combine the twin traditions of rational choice thought that have been dominant in recent years in the literature on African economic development, market economics and ‘new’ institutionalist political economy. The paper considers, in turn, the economics and politics of Ghana's economic decline and partial revival. It suggests that, while there is a consensus that ‘state failure’ was the main cause of Ghana's decline in relation to similarly endowed countries, 1950–83, the question of how far and in what respects the state should retreat from administrative control of resource allocation remains relatively open. For example, while the inconvertibility of the currency seems to have been irredeemably disastrous, the much criticized marketing board system may yet prove worthy of reform rather than abolition. There is also a consensus that the prolongation of what, for the economy as a whole, were disastrously counterproductive policies was to a great extent the result of the subordination of the public interest in economic growth to the sectional and personal interests of governments and their members. However, the paper argues that it is necessary to revise such explanations to take account of two surprisingly neglected points: (a) that economic growth in itself is a major political asset to governments in Africa as elsewhere and (b) that economic decline (as in Ghana 1975–83) requires more explanation than economic stagnation (as in Ghana 1950–75).