Market organisation and the process of economic development: the case of the partially liberalised cocoa market in Ghana.

Abstract

Within the last twenty years the link between market organisation and development has come under increased scrutiny in response to the implementation of World Bank liberalisation policies across many of sub-Saharan Africa's agriculture markets. Under the neoliberal teachings of the Washington Consensus, liberalised markets have replaced systems of government control, with disappointing results. Recognising the challenges created by the universal implementation of liberalisation policies, the attention of development economists, including the World Bank, has now turned to alternative modes of market organisation. In light of this, the following study aims to contribute to the post Washington Consensus understanding of market development through a detailed exploration of the Ghanaian cocoa market as an alternative model for market organisation within sub-Saharan agriculture. The Ghanaian cocoa market has been selected because, in contrast with its fully liberalised cocoa producing neighbours, Ghana has only undergone partial liberalisation. The Ghanaian Cocoa Board [Cocobod] maintains control over several functions across both the domestic and international dimensions of the Ghanaian cocoa chain. Given the span of the Cocobod's influence along the Ghanaian cocoa chain, it has been necessary to develop a cross disciplinary theoretical framework, using New Institutional Economics for a microanalysis of the domestic cocoa chain, and Global Value Chain analysis for a macro-analysis of the international cocoa chain. Building on a critique of the universalism inherent within the Washington Consensus, methodologically this study has attempted to achieve an in-depth understanding of the Ghanaian cocoa market. In line with the ontological approach of critical realism, this has involved the use of semi-structured qualitative interviews, throughout two independent rounds of research in Ghana. Interview data has been systematically organised and interpreted using the approach of template analysis. Based on the construction of six final templates it has been possible to deduce that direct government intervention in the areas of quality control, enforcement and a monopoly over cocoa exports appear to be having a positive impact upon market development in Ghana. Equally, it has been observed that the Cocobod may be failing to leverage the potential of private sector investment, as it struggles to adapt to partial liberalisation. In closing it is recommended that future research into models of partial liberalisation should be pursued based on the results of this study.