Economic Policy and Manufacturing Performance in Developing Countries

Economic Policy and Manufacturing Performance in Developing Countries

Edited by Oliver Morrissey and Michael Tribe

This book considers the impact of economic reforms on manufacturing performance and explores policy options for promoting manufacturing. Using country-specific case studies spanning Africa, South Asia, South East Asia and Latin America, the authors examine the evidence for and against both trade liberalisation and government support policy.

Chapter 2: Sources of industrial growth: the impact of policy on large and medium scale manufacturing performance in Ghana

Isaac Acheampong and Michael Tribe

Subjects: development studies, development economics, economics and finance, development economics, industrial economics

Extract

Isaac Acheampong and Michael Tribe 1 INTRODUCTION The principal objective of this chapter is to assess the extent to which the Ghanaian Government economic policies have affected the overall performance of the manufacturing sector over the period from the 1970s to the 1990s. In particular, the aim is to assess the impact of the Economic Recovery Programme and the Structural Adjustment Programmes which were introduced in the mid-1980s, and to form some judgement on the degree to which they have been responsible for a recovery of the large and medium scale manufacturing sector. The discussion will concentrate on large and medium scale industries, and will follow a ‘before and after’ approach based on analysis of data over the period 1970 to 1993. The analysis will attempt to identify the contributions of capital, labour and total factor productivity growth to output growth and to explore policy implications. Data for the estimation of the sources of industrial growth were obtained from published industrial statistics produced by the Ghana Statistical Service. Industrial growth may arise from increases in factor inputs (that is physical and human capital and material inputs) and from productivity growth (due to increased efficiency in using factor inputs). Economic policies pursued in a particular period and relating to the economy as a whole, and to the industrial sector in particular, influence productivity growth. For example, the shift from a regulated to a liberalised economic regime in Ghana should have improved Acknowledgements: This chapter is a revised and updated...

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