The Politics of Regional Inequality in Ghana: State Elites,Donors and PRSPs

Through an analysis of Ghana's HIPC Fund which was established as part of the PRSP process, this article shows how aid‐financed efforts to reduce regional inequality in Ghana have failed. Dominant political elites agreed to policies reducing regional inequality in order to have access to aid funding but, once approved, these funds were allocated on quite different criteria in ways that marginalised the poorest. This analysis reinforces the growing recognition that developmental outcomes in most poor countries are shaped not so much by the design of ‘good’ policies per se, but more importantly by the power relationships within which policy‐implementing institutions are embedded. Aid donors seem unable to grasp this important lesson fully, and so their capacity to contribute to reducing regional inequality remains limited.