Does market liberalisation increase total factor productivity? Evidence from the manufacturing sector in Zimbabwe

Journal of Southern African Studies

Volumn 26, Issue 3, 2000, Pages 463-479

  Bjurek, Hans ^a   Durevall, Dick ^a  

^a UNIVERSITY OF GOTHENBURG   (Sweden)

Author keywords

[No Author keywords available]

Indexed keywords

INDUSTRIAL PRODUCTION; MANUFACTURING; MARKET CONDITIONS; STRUCTURAL ADJUSTMENT; TOTAL FACTOR PRODUCTIVITY; TRADE LIBERALIZATION;

ZIMBABWE;

EID: 0033753607     PISSN: 03057070     EISSN: None     Source Type: Journal    
DOI: 10.1080/713683583     Document Type: Article

References (42)

1. Government of Zimbabwe, A Framework for Economic Reform, 1991-1995 (Harare, 1992).
2. R. Riddell, 'Industrialisation in Sub-Saharan Africa: Country Case Study-Zimbabwe', ODI Working Paper 25 (London, 1988).
3. A. Harrison and A. Revenga, 'The Effects of Trade Policy Reform: What Do We Really Know?', NBER Working Paper 5225 (1995).
4. UNIDO, 'The Manufacturing Sector in Zimbabwe', PPD/R. 2 (Vienna, 1986).
5. Government of Zimbabwe, A Framework for Economic Reform.
6. Ibid.
7. Regional Programme on Enterprise Development (RPED), 'Country Background Paper: Zimbabwe', Economic and Social Institute, Free University, Amsterdam, and Department of Economics, University of Zimbabwe (April 1993).
8. D. Durevall, N. Ncube and H. Bjurck, 'Employment, Labour Market Reform and Trade Liberalisation: Zimbabwe 1990-1998', Country Economic Report 6, Sida (Stockholm, 1999).
9. We focus on the period from 1990 to 1996 because, according to the IMF, the reform programme went off-track during 1996. As a result, there was a sharp drop in overseas development assistance and it is not clear how economic performance after 1996 is related to ESAP.
10. For different views on ESAP see K. Botchwey, P. Collier, J. Gunning and K. Hamada, Report of the Group of Independent Persons Appointed to Conduct an Evaluation of Certain Aspects of the Enhanced Structural Adjustment Facility (IMF, Washington, 1998); Zimbabwe Congress of Trade Unions, Beyond ESAP: Framework for a Long-Term Development Strategy in Zimbabwe Beyond Structural Adjustment Programme (ESAP, Harare, 1996); World Bank, Zimbabwe: Achieving Shared Growth, Country Economic Memorandum, vols. I and II (Washington, 1995); and World Bank, Zimbabwe: Consolidating Trade Liberalization (Washington, 1995).
11. For different views on ESAP see K. Botchwey, P. Collier, J. Gunning and K. Hamada, Report of the Group of Independent Persons Appointed to Conduct an Evaluation of Certain Aspects of the Enhanced Structural Adjustment Facility (IMF, Washington, 1998); Zimbabwe Congress of Trade Unions, Beyond ESAP: Framework for a Long-Term Development Strategy in Zimbabwe Beyond Structural Adjustment Programme (ESAP, Harare, 1996); World Bank, Zimbabwe: Achieving Shared Growth, Country Economic Memorandum, vols. I and II (Washington, 1995); and World Bank, Zimbabwe: Consolidating Trade Liberalization (Washington, 1995).
12. For different views on ESAP see K. Botchwey, P. Collier, J. Gunning and K. Hamada, Report of the Group of Independent Persons Appointed to Conduct an Evaluation of Certain Aspects of the Enhanced Structural Adjustment Facility (IMF, Washington, 1998); Zimbabwe Congress of Trade Unions, Beyond ESAP: Framework for a Long-Term Development Strategy in Zimbabwe Beyond Structural Adjustment Programme (ESAP, Harare, 1996); World Bank, Zimbabwe: Achieving Shared Growth, Country Economic Memorandum, vols. I and II (Washington, 1995); and World Bank, Zimbabwe: Consolidating Trade Liberalization (Washington, 1995).
13. For different views on ESAP see K. Botchwey, P. Collier, J. Gunning and K. Hamada, Report of the Group of Independent Persons Appointed to Conduct an Evaluation of Certain Aspects of the Enhanced Structural Adjustment Facility (IMF, Washington, 1998); Zimbabwe Congress of Trade Unions, Beyond ESAP: Framework for a Long-Term Development Strategy in Zimbabwe Beyond Structural Adjustment Programme (ESAP, Harare, 1996); World Bank, Zimbabwe: Achieving Shared Growth, Country Economic Memorandum, vols. I and II (Washington, 1995); and World Bank, Zimbabwe: Consolidating Trade Liberalization (Washington, 1995).
14. S. Malmquist, 'Index Numbers and Indifference Surfaces', Trabajos de Estadistica, 4 (1953), pp. 209-242.
15. D.W. Caves, L.R. Christensen and W.E. Diewert, 'The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity', Econometrica, 50, 6 (November 1982), pp. 1393-1414.
16. See R. Färe, S. Grosskopf, M. Norris and Z. Zhang, 'Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries', American Economic Review, 84, 1 (March 1994), pp. 66-83, and H. Bjurek, 'The Malmquist Total Factor Productivity Index', Scandinavian Journal of Economics, 98, 2 (1996), pp. 303-313.
17. See R. Färe, S. Grosskopf, M. Norris and Z. Zhang, 'Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries', American Economic Review, 84, 1 (March 1994), pp. 66-83, and H. Bjurek, 'The Malmquist Total Factor Productivity Index', Scandinavian Journal of Economics, 98, 2 (1996), pp. 303-313.
18. Although we know that many goods are produced in oligopolistic or monopolistic markets, we have no information about the market structure at the aggregated sector level used in this study. 15 The assumption of constant returns to scale is standard but is in many cases too restrictive. This is, for instance, the case with firm level data where it is preferable to allow for variable returns to scale. See, e.g. Bjurek, 'The Malmquist Total Factor Productivity Index'. However, in this study where we measure productivity at sector level with time series data an assumption of variable returns to scale may lead to serious identification problems, as well as difficulties with interpretation.
19. See Caves et al., 'The Economic Theory of Index Numbers'.
20. Government of Zimbabwe, A Framework for Economic Reform.
21. D. Durevall, H. Bjurek and T. Godana, 'Structural Adjustment and Productivity: A Study of the Manufacturing and Agricultural Sectors in Zimbabwe', Country Economic Report 1, Sida (Stockholm, 1998).
22. Government of Zimbabwe, A Framework for Economic Reform.
23. Foreign aid in constant prices was measured by deflating the value of foreign aid in US dollars by the US wholesale price index. The nominal value of foreign aid was taken from C. Chang, E. Fernandez-Arias and L. Serven, 'Measuring Aid Flows: A New Approach', World Bank Policy Research Working Paper 2050 (1999). See Appendix for details.
24. OECD, Geographical Distribution of Financial Flows 1960-1996 (Paris, 1996).
25. World Bank, Global Development Finance (Washington, 1998).
26. Chang et al., 'Measuring Aid Flows'.
27. D. Durevall and P. Kadenge, 'Inflation During Structural Adjustment: The Case of Zimbabwe', in C. Mumbengegwe (ed), Zimbabwe: Macroeconomic Policy, Management and Performance since Independence (London, Macmillan, forthcoming).
28. A.K. Dixit and R.S. Pindyck, Investment under Uncertainly (New Jersey, Princeton University Press, 1994).
29. M.J. Roberts and J.R. Tybout, 'Producer Turnover and Productivity Growth in Developing Countries', The World Bank Research Observer, 12, 1 (February 1997), pp. 1-19.
30. See W. Enders, Applied Econometric Time Series (New York, John Wiley, 1995).
31. See J.R. Tybout, 'Linking Trade and Productivity: New Research Directions', The World Bank Economic Review, 6, 2 (May 1992), pp. 189-212 and J. Weiss, 'Trade Policy Reform and Performance in Manufacturing: Mexico 1975-88', Journal of Development Studies, 29, 1 (October 1992), pp. 1-24.
32. See J.R. Tybout, 'Linking Trade and Productivity: New Research Directions', The World Bank Economic Review, 6, 2 (May 1992), pp. 189-212 and J. Weiss, 'Trade Policy Reform and Performance in Manufacturing: Mexico 1975-88', Journal of Development Studies, 29, 1 (October 1992), pp. 1-24.
33. Tybout, 'Linking Trade and Productivity'.
34. Durevall et al., 'Employment, Labour Market Reform and Trade Liberalisation'.
35. Roberts and Tybout, 'Producer Turnover and Productivity Growth in Developing Countries'.
36. Government of Zimbabwe, A Framework for Economic Reform.
37. See S. Lall and S. Wangwe, 'Industrial Policy and Industrialisation in Sub-Saharan Africa', Journal of African Economies, 7, Supp. 1 (June 1998) and Zimbabwe Congress of Trade Unions, Beyond ESAP.
38. See S. Lall and S. Wangwe, 'Industrial Policy and Industrialisation in Sub-Saharan Africa', Journal of African Economies, 7, Supp. 1 (June 1998) and Zimbabwe Congress of Trade Unions, Beyond ESAP.
39. Chang et al., 'Measuring Aid Flows'.
40. OECD, Geographical Distribution.
41. World Bank, Global Development Finance.
42. Chang et al., 'Measuring Aid Flows'.