Adjustment and long-run economic performance in 18 African countries

Fiseha Gebregziabher

doi:10.1002/jid.3056

Adjustment and long-run economic performance in 18 African countries

Fiseha Gebregziabher^*

^*Corresponding author for this work

Department of Economics

4 Citations (Scopus)

Abstract

This paper investigates the link between IMF-World Bank stabilisation-cum-structural adjustment programs and long-run economic performance in 18 African countries on a country-specific basis for the period 1960-2009. We employ a structural break approach to study the impact on long-run growth trajectories of the introduction of adjustment programs. The analysis reveals that only few countries have shown positive and sustained results. The traditional (first-generation) Fund-Bank adjustment package is linked with sustained increase in Gross Domestic Product, export and investment growth rates only in two countries (Ghana and Uganda). Many African economies remained on their pre-reform growth paths whereas some others experienced growth deceleration, despite more-than-a-decade-long adjustment. Taken as a whole, countries in the CFA franc currency zone fared much worse than their non-CFA counterparts because of the different adjustment strategies pursued.

Original language	English
Journal	Journal of International Development
Volume	27
Issue number	2
Pages (from-to)	170-196
Number of pages	27
ISSN	0954-1748
DOIs	https://doi.org/10.1002/jid.3056
Publication status	Published - 1 Mar 2015

Keywords

Adjustment programs
CFA franc countries
IMF
Multivariate cointegration
Sub-Saharan Africa
World Bank

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AB - This paper investigates the link between IMF-World Bank stabilisation-cum-structural adjustment programs and long-run economic performance in 18 African countries on a country-specific basis for the period 1960-2009. We employ a structural break approach to study the impact on long-run growth trajectories of the introduction of adjustment programs. The analysis reveals that only few countries have shown positive and sustained results. The traditional (first-generation) Fund-Bank adjustment package is linked with sustained increase in Gross Domestic Product, export and investment growth rates only in two countries (Ghana and Uganda). Many African economies remained on their pre-reform growth paths whereas some others experienced growth deceleration, despite more-than-a-decade-long adjustment. Taken as a whole, countries in the CFA franc currency zone fared much worse than their non-CFA counterparts because of the different adjustment strategies pursued.

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KW - CFA franc countries

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KW - Multivariate cointegration

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Adjustment and long-run economic performance in 18 African countries

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