The Price Incentive to Smuggle and the Cocoa Supply in Ghana, 1950-96

Author/Editor:

Ales Bulir

Publication Date:

June 1, 1998

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

From the early 1960s to the early 1980s, the officially recorded production of cocoa in Ghana declined by 60 percent. During the 1983–95 Economic Recovery Program, however, cocoa production doubled. Although these developments have inspired much empirical research, most of the studies have been unable to explain the medium-term persistence of cocoa output to remain below its estimated capacity level. The paper argues that the price incentive to smuggle can explain as much as one-half of the observed decline in output and the subsequent recovery. A cointegration analysis and a dynamic error-correction model of cocoa supply support the analysis.

Series:

Working Paper No. 1998/088

Subject:

Agricultural commodities Agricultural prices Anti-smuggling Commodities Exchange rates Foreign exchange Prices Producer prices Revenue administration

English

Publication Date:

June 1, 1998

ISBN/ISSN:

9781451851137/1018-5941

Stock No:

WPIEA0881998

Pages:

26

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