Managing trade liberalization: Legal system deficiencies and the political economy of contingency protection in Ghana

Abstract

This article proposes to critically examine how effectively Ghana has managed pressures by domestic import-competing industries and unionized labour for protection since the country engaged in radical and far-reaching trade liberalization under World Bank and IMF auspices. It argues that the heavy influence of public choice theory on the conception of regulatory role of government in the economy held by these principal architects of Ghana's trade reforms has resulted in the omission to provide for contingency protection measures for domestic industries adversely impacted by imports as a consequence of liberalization. Though these measures pose a counternormative threat to free trade, the article takes the position that they are necessary tools for the effective management of protectionist pressures and therefore for sustaining free trade itself. Finally, it concludes that the uncritical application of choice theoretic analyses to Ghana's trade reforms may be mistaken and that there is no rational alternative to dealing with the problem of protectionist pressure other than a resort to the legitimate mechanism provided under international law.