Structural adjustment and African industry

A recent World Bank study comes to optimistic conclusions about the impact of adjustment on African industry and exports. This paper questions both the underlying approach and the empirical evidence. The analysis on which adjustment programs are based ignores market failures in the process of developing competitive capabilities. The data do not establish that adjustment benefited industry. The experience of Ghana, the strongest adjuster in Africa, shows a spurt followed by relative stagnation and little manufactured export diversification. Accepting the desirability of openness and policy reform, the policy needs that emerge are very different from those of Bank adjustment programs.