The government was slow to react to expectations being disappointed. This created a debt problem. Drought and terms of trade shocks make things worse. No allowance is made for the likelihood of these shocks. Forced saving by the private sector enables greater domestic borrowing by the government, but this reduces private consumption.
Uncertainty caused by the growing public-sector debt reduces private investment.
The result is a further reduction in the growth rate. A macroeconomic model shows that the variable with greatest influence on overall growth is agricultural output. However, the budget deficit has an unambiguously negative impact on exports. In other words, some of the policies implemented after independence and aimed at redistributing resources or alleviating poverty have been unsuccessful, or have perverse effects, creating distortions which push the economy towards macroeconomic instability. In Zimbabwe the growth of government has become a drain on the economy, rather than a facilitator of economic growth and development.