Working paper 112
This paper explores the political economy drivers of Ghana’s flagship cash transfer programme, Livelihood Empowerment Against Poverty (LEAP). In contrast to existing accounts of the LEAP as a domestically driven cash transfer scheme, the evidence here shows that donor pressures, leveraged through financing, played a more prominent role than the paradigmatic ideas of domestic political elites in shaping the adoption of the LEAP. Despite the recent discovery of oil and the country’s subsequent ascension to middle-income status, donors remain important players in the Ghanaian political economy, given their dominance in the investment component of government’s budget and the resultant inability of political elites to generate the rents that are so badly needed for meeting various redistributive demands without donor financing. However, once the LEAP was adopted, domestic political calculations and the incentives generated by Ghana’s political settlement dynamics took centre stage in shaping the actual implementation of the programme, especially around questions of targeting and geographical coverage, and the prioritisation of reforms with more visible impact that could be leveraged upon to win competitive elections. These findings suggest that an adapted political settlements framework that goes beyond domestic political calculus, and which explicitly incorporates the influence of ideational and transnational factors, can greatly improve our understanding of the political economy drivers of social protection in Africa.