SLUfellows Presentation

251 views

Published on

Why Markets Fail in Ghana

Published in: Business, Travel
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
251
On SlideShare
0
From Embeds
0
Number of Embeds
8
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

SLUfellows Presentation

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

×