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From Extensive to Involutionary Growth: A Dialectic Interpretation of the Boom and Busts of Cocoa Production in the Gold Coast

Green, Erik
Journal of agrarian change 2017 v.17 no.3 pp. 518-534
crop production, economic development, forests, growth models, issues and policy, markets, Ghana
African economic history has undergone impressive revitalization in the past decade. Much of the recent work is, quite naturally, inspired by developments in economic history at large, and increasingly – indirectly or directly – using markets as the organizing principle in understanding how economies evolve over time. More specifically, recent work assumes that markets create the possibility to use resources more efficiently, which, theoretically, enables economies to grow as long as institutions adjust and enable the population to exploit the arising opportunities. That is, the current works in African economic history are to a large extent grounded in Smithian growth models, labelled after Adam Smith's work on the mechanisms of long‐term growth. This paper critically discusses the explanatory value of the Smithian growth models for understanding the long‐term economic development in Africa. The latter is best described as recurrent growth episodes, and we argue that while Smithian models can account for initial periods of growth, they fail to explain why the growth was not sustained. We use the boom and busts of cocoa production in Ghana in the twentieth century as a case in point. We show that the decline in cocoa production was not caused by state policies distorting the functions of the markets, as the Smithian growth models suggest. Instead, the decline in production was an outcome of changes in the ecological and institutional conditions that caused the initial growth. The irony is that it was the initial growth in cocoa production that altered the conditions, making further growth in production impossible. We capture these changes – for the first time ever – by combining the concepts of forest rents and involutionary growth in an African case.