The Burkinabe Cotton Story 1999-2007: Sustainable Success of Sub-Saharan Mirage?

Like many other African countries in the 1980s, Burkina Faso was urged to engage in a far-reaching liberalization of its state-led cotton sector. Yet unlike most of its neighbors, the Burkinabè government rejected both the status quo and wholesale liberalization, and instead embarked on a more gradual and sequenced reform path characterized by institutional innovations and partial privatization. Whether the reforms contained genuinely successful elements is therefore an important question, but also a difficult one given the absence of a counterfactual, the confounding influence of exogenous shocks and the recent financial troubles of the sector. To unravel this puzzle, this paper reviews existing evidence linking the reforms to various outcomes, but also develops a novel counterfactual analysis to more rigorously assess the impacts of these reforms. Our analysis shows that while many elements of the reform process did achieve important economic objectives, return migration from Cote d’Ivoire explains a third of production growth, financial elements of the reforms were not fully sustainable, and institutional arrangements failed to fully empower cotton farmers. This provides both positive and negative lessons for other would-be cotton reformers.