Political Economy Analysis of the Macroeconomic Impact of National Elections in Ghana During the Fourth Republican Era, 1992 to 2016

Abstract

The study dealt with the analysis of macroeconomic impact of national presidential elections in Ghana during the Fourth Republican period from 1992 to 2016 based on effects of these elections on economic growth, government budget deficits, inflation and interest rates. Using annual data covering the period, 1992 to 2016, the analysis indicated that national elections did not lead to significant increase in annual economic growth as measured by the changes in real gross domestic product (GDP). However, the increase in government budget deficits during election years was established. Further, based on quarterly data covering 100 periods from 1992 to 2016, we showed that elections produced significantly higher levels of inflation and interest rates. Our study confirmed anecdotal evidence of worsening macroeconomic performance of the economy of Ghana as a result of national presidential elections which hurt ordinary Ghanaians especially those living on fixed incomes such as pensioners due to higher inflation, and also adversely affected small and medium scale businessmen as a result of increased borrowing costs from higher interest rates.