The application of economywide techniques as a tool to understand policy impacts

Abstract

Over the past few decades, the pursuit of sustainable growth and development has been the focus of economic policy in Africa. The challenges confronting Africa range from poverty, unemployment, inequality, insufficient and sometimes, inefficient public service provision, through to environmental degradation. In attempting to solve these problems, African governments have traditionally used a variety of policies: and it is upon the effectiveness and efficiency of such policies that people’s livelihoods depend. However, the practical implementation of a policy may not only fail to achieve the desired outcomes, but may in fact unfairly privilege one group or sphere over another. In this article, it is argued that in order to fully understand the effects of the range of policies available to policy makers, as well as their interconnectivity and cohesiveness, a valuable framework to use is the economy-wide analysis. The article explains such a framework and exposes some applied studies that have employed the framework in order to gain insights into policy analysis. An advantage of the methodology is its quantitative nature which allows for measurement of impacts. It is recommended that such methods ought to be part of a toolkit for policy makers.