Is Globalisation Good for Africa?
AbstractGlobalisation or market integration in Sub-Saharan Africa is closely linked to the structural adjustment programmes. In this paper we focus on their dependence on politics and institutional characteristics of the countries concerned. In particular, we argue that one important explanation for the dismal performance of many African countries, in spite of all the measures taken towards market liberalisation, is a lack of willingness or ability on the part of the politicians to respect the restrictions imposed on their behaviour and policy choices by the liberalised markets. The point we make in this paper is that market integration magnifies the effects of policies. We look specifically at the increased exposure to international prices and returns on assets make the economic equilibrium relations, the law of one price (LOP) and uncovered interest parity (UIP), relevant guidelines for economic policy. We illustrate the arguments by presenting the case of Zimbabwe. It is a good example where the lack of respect for the restrictions imposed by international markets has led to an economic crisis with negative growth rates and a process away from globalisation.
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Bibliographic InfoPaper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 67.
Length: 33 pages
Date of creation: 25 Mar 2002
Date of revision:
Publication status: Published in World Economy, 2003, pages 1119-36.
Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Globalisation; structural adjustment; institutions; economic growth; Law of one price; uncovered interest rate parity; Zimbabwe;
Find related papers by JEL classification:
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O20 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - General
This paper has been announced in the following NEP Reports:
- NEP-AFR-2002-04-25 (Africa)
- NEP-ALL-2002-04-25 (All new papers)
- NEP-DEV-2002-04-25 (Development)
- NEP-IFN-2002-04-25 (International Finance)
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