The gains from liberalization have been disappointing. The benefits were undermined by high inflation and interest rates caused by excessive government borrowing. High interest rates, together with the rigidities that prevent resources from moving efficiently, make investor response to the liberalized markets very difficult and haphazard. The uncertainty created by conflicting messages portrayed in the rhetoric and actions of the government further reduce investor confidence. This paper traces some of the emerging political and institutional forces that have influenced economic policy and considers the success, constraints and potential for agriculture in Zimbabwe.
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