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

Ales Bulir

No 1998/088, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; producer price; price; producer; supply; Ghana; cocoa supply; smuggling; commodity taxation; cointegration; Ghana-Côte d'Ivoire price differential; international price; cross-price elasticity; price development; Agricultural commodities; Producer prices; Anti-smuggling; Agricultural prices; Exchange rates; Global (search for similar items in EconPapers)
Pages: 26
Date: 1998-06-01
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Citations: View citations in EconPapers (5)

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