Exchange Rate, Fiscal and Agricultural Policies in Africa: Does Adjustment Hurt the Poor?

Sahn, David E.; Dorosh, Paul; Younger, Stephen

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Title:	Exchange Rate, Fiscal and Agricultural Policies in Africa: Does Adjustment Hurt the Poor?
Authors:	Sahn, David E. Dorosh, Paul Younger, Stephen
Year:	1996
Periodical:	World Development
Volume:	24
Issue:	4
Period:	April
Pages:	719-747
Language:	English
Geographic terms:	Subsaharan Africa Africa
Subjects:	economic policy poverty income distribution Economics and Trade Agriculture, Natural Resources and the Environment Development and Technology
External link:	https://doi.org/10.1016/0305-750X(95)00167-B
Abstract:	Trade, exchange rate, fiscal and agricultural sector policy reforms are the pillars of structural adjustment programmes (SAP) in Africa. The major concern of this paper is whether devaluation, fiscal policy reform, and agricultural market liberalization worsen income distribution and adversely affect the poor. The authors' research has concentrated on 10 African countries: Cameroon, The Gambia, Ghana, Guinea, Madagascar, Malawi, Mozambique, Niger, Tanzania and Zaire. The general conclusion of the study is that in most countries adjustment policies improve income distribution and do not adversely affect the poor. The results indicate that trade and exchange rate reforms are associated with a large decline in economic rents and a shift in relative prices that favour the rural and urban poor. Fiscal reforms have not brought about draconian belt-tightening measures, although the incidence of public spending, particularly in the social sectors and in terms of public sector employment, remains far from progressive. Reduction of export crop taxation contributes to higher incomes for the poor, and domestic food crop liberalization has not led to increases in purchase prices of staple commodities for most low-income households. App., bibliogr., notes, ref., sum.

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