The promoting the engagement of women

253 fell into a period of severe conflict in 2002-2007; experience, is leadership the key, or is it underlying many lives were lost, and resources continue to institutions? Or popular movements? Education? be diverted into managing the problems, with Imported ideas and technology? These remain en- perceptions of prospects still damaged. French during questions, and answers may depend on lo- military involvement reflected France’s ongoing cal circumstances. unique relationship with CIV. In contrast, Ghana As an examination of just two countries to illus- has so far remained stable. Why? And can it trate more general evidence in the literature, it can- continue to remain stable? It remains to be seen not be concluded beyond doubt that institutions set how well Ghana comes through its recent discovery up by Britain in Ghana and France in Côte d’Ivoire and production of oil. In principle, new resources had a dominant effect on the successes and failures can help reduce poverty, directly and indirectly. But of these nations in subsequent poverty reduction for many countries, a “resource curse” has resulted and economic growth. But there is support for fac- from political conflict over resource revenues, and tors identified in the large-sample statistical studies an overspecialized or even “hollowed out” economy introduced in Chapter 2, notably institutions, in- (see Chapter 14). equality, and at least indirectly education. Colonial Business scholars emphasize company leadership. institutions apparently had negative effects, and Have leadership differences mattered for develop within colonization the degree of decentralization ment of these countries? Socialist Kwame Nkrumah under colonial rule apparently also mattered.

The constructively supported education but diverted re-reemergence of more decentralized governance in sources from cocoa exports to local industry, leading Ghana since 1992 may be related to less damaging to economic disaster; under duress, socialist Jerry British governance practices in this respect. At the Rawlings embraced market-oriented policy reforms same time, history was not destiny; Ghana has that led to short-term pain but long-term gain. Sub- made progress not well predicted by instruments sequent leaders have been pragmatic and at least for colonial institutions. Nor are things necessarily done relatively little harm and perhaps some good. bleak for CIV. Institutions and inequality are highly CIV’s capitalist President Felix Houphouet-Boigny, resistant to change. But the global trend is toward backed by France (“Françafrique”), seemed early on continued progress on human development, and to be leading his country to economic success but other African nations such as Rwanda have made stole billions from the public purse and led the enormous economic strides that were very difficult country to ruin while clinging to power for 33 years to imagine just a few years earlier. Meanwhile, the until his death in 1993. Subsequent leadership has standoff following contaminated presidential elec- impressed few observers. Of course extraordinary tions in 2010 confirmed that institutions remained leadership in government or of civil society can weak in CIV. The optimistic reading was that this play a decisive role in the course of development time the international community could play a con- think of Nelson Mandela in South Africa, or structive role in facilitating improvements in the Muhammad Yunus in Bangladesh. But in ordinary underlying institutions. Sources The authors would like to thank Gina Lambright, David Adjibolosoo, Senyo. “Ghana at fifty years old: A critical Shinn, and Jennifer Spencer for their comments on the review of the historical genesis of why Ghanaians are first draft of this case study, and Andrew Klein and where they are today.” Review of Human Faclur Studies. Kevin Salador for their research assistance. 13 (2007): 6 40. Acemoglu, Daron, Simon Johnson, and James A. Robin- son. “The colonial origins of comparative develop- Alesina, Alberto, and Eliana La Ferrara. “Ethnic diversity ment: An empirical investigation.” American Economics and economic performance.” Journal of Economic Litera- Review 91 (2001): 1360-1401. ture 43 (2005): 762_800. 255 Development Policies much higher price, and technical assistance was of- Policies in Ghana Both nations started as (and still fered, output greatly increased particularly in two are) largely agrarian economies, with over half of spurts in the late 1980s and early 2000s. Fertilizer the labor force working in rural areas.

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But the Lise and improved varieties have diffused among two countries have had somewhat different policy farmers (diffusion in Chana for the case of pineap- trajectories. The general scholarly view is that in ples is examined in Findings Box 9.1 in Chapter 9). the first quarter century after independence, Ghana Cocoa growing now provides a basic livelihood for chose many poorly conceived and often corrupt over 700,000 farmers in Ghana. interventionist policies. Early policies have been In contrast, CIV experienced relatively faster described as oriented toward urban industry, with growth in the 1960s and 1970s and then decline from import substitution to replace manufactured imports 1980 to present (recently more pronounced due to with locally produced ones (see Chapter 12). One civil conflict). Institutions that appear to perform policy associated with the early rule of Kwame serviceably for two decades can have underlying Nkrumah through 1966 was an emphasis on basic weaknesses that later emerge-for example politi- education, which may have left an enduring legacy cians treat weaknesses as a political opportunity or through difficult subsequent swings. After disastrous the system proves to have too little flexibility as new policies and extreme instability including coups in challenges emerge. the mid-1960s to early 1980s, Ghana underwent a policy transformation to become a favorite country of Policies In Côte d’Ivoire CIV, in contrast, is widely liberalization promoters in the World Bank and viewed as having started down a more market- elsewhere in the 1980s. A reason given for large-scale based, export-oriented path in a way that should reform in Ghana (and in explaining other countries as have helped the rural agricultural sector, where well) is that things got so bad that there became no most of the population and most people living in choice but to embrace reform; naturally, when poverty were located. But this did not prevent elites according to local conditions things become so bad from extracting what they could from the rural that continued resistance to change is futile, something areas. In fact, there were a number of policy lurches. changes—perhaps not always for the better. Ghana An apparently favorable tactic may have been an became a classic example for proponents of the early policy of effectively trying to keep all the controversial view that duress “causes” reform. A ethnic groups engaged in and benefiting from criticism, to paraphrase Dani Rodrik, is that it is not growth in the national economy. There were large clear how much duress is enough to “cause” reform; migrations into CIV, for example, including the and as a result, it is not very convincing when forced labor brought into CTV from Burkina Faso analysts simply claim that a reform did not happen Upper Volta) by the French in the carly 1940s. A because the situation must not have been bad more ethnically based politics in the late 1990s is enough. By the early 1990s, World Bank analysts such viewed by specialists in the politics of CIV as as Ishrat Husain were pointing to Ghana as a country helping precipitate the disaster of regional and that had been doing a better job at following and ethnic conflict in the 2000s. Besides colonial rule implementing more of its recommended market having strongly negative effects, close Côte d’Ivoire friendly policies than countries such as Côte d’Ivoire dependence on one nation (France) may have been a The development process is complex and rarely development over the long run. For Ghana, diver- hindrance to its growth and economic and political proceeds linearly. In Ghana, there was relative dete- rioration from independence until the early 1980s; sification of foreign relationships is one of the can- much of its economic growth took place from the didates for explaining its relative success. mid 1980s to the present. For example, cocoa had long been an important part of Ghana’s economy, Enduring Questions By 1990, Ghana was already but it went into decline when state marketing being deemed a “success story” by the World Bank boards (described in Chapter 9) limited the price and others. Is it because the nation followed the farmers received for cocoa, so as to subsidize indus- right policies? But even if so, what explains why trialization.

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