How, When and Why does Poverty get Budget Priority? Poverty Reduction Strategy and Public Expenditure in Ghana

Working and discussion papers
March 2002
Mick Foster and Douglas Zormelo

This paper is one of five country case studies which seek to answer the questions how, when and why does poverty get budget priority?

Following prolonged economic decline, the economic stabilisation and market liberalisation policies of the 1980s enabled Ghana to raise GDP and living standards. However, improved policies were not sustained in the 1990s, and Ghana has experienced lower economic growth, ‘boom and bust’ economic management, and a ballooning debt burden which has squeezed public expenditure.

The main objective of policy in the adjustment years was to restore economic growth, though the 1986 Programme of Actions to Mitigate the Social Costs of Adjustment (PAMSCAD) sought to mitigate the adverse effects of economic reforms on some groups. Poverty, and particularly human development, was given a stronger emphasis in planning and policy documents prepared in the mid 1990s, though the first 5 year development plan (1997-2000)1 was based on unrealistic growth assumptions, was not fully costed, and had little impact on the allocation of resources in the budget.

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