Trade Shocks in Developing Countries: Volume I: Africa: (Trade Shocks in Developing Countries)

Developing countries frequently experience trade shocks and the policy implications of this have been debated for decades.This important book is Volume 1 of a comparative study covering 23 countries, using a common methodology to estimate the effects of shocks. The conventional wisdom has been that private agents, in particular peasant farmers, could not be trusted to use windfalls wisely. This was, and continues to be, the main rationale for stabilising taxation of export crops. The convention was also that windfalls accruing to the public sector were a bane since governments had low savings rates. The evidence in this definitive study supports neither generalisation. Trade shocks typically lead to high savings rates, irrespective of whether they accrue to private producers or to the government. However, the case studies find substantial policy errors so that windfalls are often not translated efficiently into permanent income increases and indeed often lead to a reduction in output. The studies argue for a drastic revision of the case for government action in response to trade shocks. Volume 1 deals with Africa, Volume 2 with Asia and Latin America.

Table of Contents:
1. Trade Shocks: Theory and Evidence, Paul Collier and Jan Willem Gunning 2. Anatomy of a Temporary Trade Shock: the Kenyan Coffee Boom, 1976-79, David Bevan, Paul Collier, and Jan Willem Gunning 3. Ghana's Management of a Temporary Windfall: The Cocoa Boom of 1976-77, Deborah Wetzel 4. The Ivorian Cocoa and Coffee Boom of 1976-79: The End of a Miracle?, Hafez Ghanem 5. Malwi's Positive Trade Shock, 1977-79, Jane Harrigan 6. Private and Public Sector Responses to the Sugar Boom in Mauritius, 1972-75, David Greenaway and Roland Lamusse 7. The Groundnut and Phosphates Boom in Sengal, 1974-77, Jean-Paul Azam and Gerard Chambas 8. The Zambia Coffee Boom and Crash, 1964-80, Janine Aron 9. The Diamond Boom, Expectations, and Economic Management in Botswana, Catherine Hill and John Knight 10. The Uranium Boom in Niger, 1975-82, Jean-Paul Azam 11. Cameroon, Shanta Devarajan 12. Trade Shock, Oil Boom, and the Nigerian Economy, 1973-83, T. Ademola Oyejide 13. Multiple Trade Shocks and Partial Liberalization: Dutch Disease and the Egyptian Economy, Nemat Shafik

Review :
This is a work that should be read by those working on the macroeconomics of developing countries, whether as researchers or policy analysts Journal of International Development The absence of formality makes the book accessible to the non-specialist. However, this surface accessibility masks highly sophisticated reasoning and the application of complicated empirical accounting exercises Journal of International Development