Paper short abstract:

This paper will examine the state-led 'dirigiste' economic approach which Ghana had pursued from the country's independence in 1957 to the early 1980s versus the current neoliberal-type approach as being practised over the last quarter century, thus enabling us to draw some important lessons.

Paper long abstract:

Ghana provides a good example of a developing country which started its economic life greatly influenced by the planning strategy with strong state controls and, subsequently, made a complete turnaround, adopting in 1983 the Structural Development Programmes, emphasising neo-liberal values especially private enterprise development and free trade. It is now well documented that the resource allocation under state-led 'dirigiste' economic approach caused some severe economic problems and in the early-1980s, the economy was about to collapse (Huq 1989). Fortunately, the adoption of the liberalisation strategy has greatly helped the economy to revive and transform, enabling high GDP growth in the recent decades. But it is really disturbing that this country which has been acclaimed by the World Bank as an example of economic miracle had to join in 2001 the rank of the highly indebted poor countries (HIPCs). Not surprisingly, a growing number of critics are now questioning the uncritical pursuit of the neoliberal strategy (see, e.g., Opoku 2010, and Ayelazuno 2014). A serious major criticism is that the push for liberalization has not been accompanied by an equal push for the growth of local private enterprise. Other major concerns include the failure of the economy to diversify, the low growth of savings and the severe fiscal balance that the economy has recently been experiencing. We will analyse closely the growth of the Ghanaian economy covering some sixty years and, in particular, examine the pursuit of the two opposite development strategies, thus helping us to draw some important lessons.

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