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Why Free Markets Fail in Ghana
 

Why Free Markets Fail in Ghana

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SLU Fellows Presentation

SLU Fellows Presentation

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    Why Free Markets Fail in Ghana Why Free Markets Fail in Ghana Presentation Transcript

    • Why Free Markets Fail in Ghana By Kwasi Osei-Kusi ‘09 University Fellow Faculty Mentor: Dr. R.A. Blewett
    • Do Free Markets exist in Ghana?
      • Free trade
      • Not too much government interference
      • Privatization of SOEs
      • Open markets
      • Entrepreneurial ability
    • Have Free Markets Failed in Ghana?
      • GDP $2480 (ppp adjusted)
      • HIPC
      • Ranks 135 by UNDP HDR
    • What theories explain the failure of free markets in Ghana?
      • Political Instability
      • Corruption
      • Culture – laziness, non-western business attitudes etc
      • Biases in world system of trade
      • Colonialism
    • Modern theories
      • Inability to create capital (unproductive assets or “dead capital”)
      • Low financial development
    • Inability to create capital
      • Too many assets in extra legal sector
      • Insufficient documentation of ownership rights
      • Entry to formal systems difficult
      • Effects
      • -Limits use of assets
      • -Difficult to obtain financing with extra legal assets
      • -Hinders flow of information about assets
    • Low financial development
      • A large unbanked population
      • Underdeveloped secondary markets
      • Effects
      • -Inefficient means of channeling funds
      • -Limits availability of credit
      • -Discourages innovation etc.
    • Summary
      • Free markets exist in Ghana but to a significant extent, have failed
      • Theorized reasons for this include corruption, colonialism etc
      • Modern analysis shows that inability to create capital and low financial development explain this failure