The Supply Response To Exchange Rate Reform In Sub Saharan Africa

The need for agricultural reform; How far did reforms go? Impact of the reforms; The future of agricultural market reform in Sub-Saharan Africa.

Inflation could rise permanently and substantially as a result of unifying official and black market exchange rates, even if real government spending remains constant.

The papers in this volume are divided into eight broad and interrelated topics that concern African economic reform : exchange rate policy, parallel markets, fiscal deficits and expenditure policy, financial sector policy, trade policy, regional integration, human capital and entrepreneurship, and growth oriented adjustment. The editors of this collection of papers submit that seven conclusions can be drawn from these papers : 1) a realistic exchange rate policy is crucial for growth; 2) returns to investment are typically very low in Africa; 3) trade diversification is necessary to get away from the problem faced by many African countries of declining terms of trade for their major exports; 4) the role of the informal financial system in resource mobilization and allocation needs to be recognized; 5) formal efforts at regional integration in Africa have failed so far; 6) incentive policies are an important element of the package needed to restore growth, but they are not enough; and 7) the level of human capital development has been very low.

This volume analyzes the political economy of the successes and failures of the agricultural reform programs in Sub Saharan Africa. It shows that in almost all cases reforms lead to a supply response but their sustainability in face of shocks depend on the consensus about the reform and the subsequent rent distribution.

Examines the interaction between macroeconomic and agricultural sector reforms in developing and East European economies.