Ghana, you were doing so well!

Noah Smith in Noahpinion:

So, unfortunately, it’s time for another one of these. By which I mean both a “[Country], you were doing so well!” post, and a “Why [country] is having an economic crisis” post. I thought Ghana was going to be one of my development success stories, and then before I got around to writing about, its economy went into a crisis. The basic story here is that Ghana just defaulted on most of its external debt, and is experiencing very high inflation, and is going to have to be bailed out by the IMF. That’s going to result in financial and economic chaos in the country, a year or two of depressed economic activity, and hardship for the Ghanaian people.

I’m sure Ghana will eventually bounce back. And as I’ll explain, when we look at the particulars of how this crisis has played out, we see that the government is being smarter than many. But overall this is pretty disappointing. So first I’ll talk a bit about why it’s so disappointing, and then move on to the crisis itself.

More here.