Owning economic reforms: a comparative study of Ghana and Tanzania

This paper compares reform ownership in Ghana and Tanzania over the past two decades. The paper: identifies the factors, including institutions and policies, that determine the countries’ capacity to formulate, implement and sustain economic reforms reviews the evidence on the links between ownership and reformprovides a chronology of the reform process in both countries, including the role of domestic institutions as well as that of donorssummarises the determinants of reform ownership.It finds that on several dimensions, Ghana’s early economic reforms enjoyed a high degree of ownership. That ownership was not embedded, however, in a politico-institutional framework that ensured that ownership would be maintained. Initial efforts to broaden consultation were not maintained and the small economic team was insufficiently widened. The politically more difficult second-generation reforms, the move to multi-party democracy and the exponential increase in aid contributed to a decline in ownership in Ghana. In the case of Tanzania, while initial reform efforts were made without aid, the acrimonious debate with donors that preceded the eventual agreement with the IMF and the socialist ideological heritage strengthened the perception of little ownership. Tanzania’s relatively weak state capacity and weakened policy decision making process have contributed to lower ownership. Most important, however, the high degree of aid dependency and dominance of donors sometimes tends to mask the real attempts the country is making. Tanzania has made interesting innovations in trying to manage its relations with donors. If they are to succeed, state and institutional capacity must be strengthened and donors must give the country some space.Key conclusions are:historical antecedents to reform are important determinants of subsequent progress and while reform can sprout from many political environments, what is important is political commitmentthe nature of the aid relationship and how it evolves are important determinants of reform ownership. This relates to the number of donors relative to the country's co-ordination capacity and the type of technical assistance it receivesanalytical capacity among implementing institutions is crucial to the ownership of policies and programmesreform ownership is a dynamic concept, evolving with changes in the economya strong institutional mechanism for accountability is the foundation on which mutual trust is built between recipient and donorThe donor community’s desire to control aid, in order to ensure full accountability to the home electorate must be balanced against the need to allow sufficient space for recipients to refine their bureaucratic systems and evolve their own procedures for aid management.