Development of Commodity Exchange Markets as an Avenue to Foster Economic Development in Africa

As summarized by Hilary Till, Contributing Editor, Global Commodities Applied Research Digest

In this article, the author questions to what extent a government should be “hands off” in the development of commodity exchanges. Given the scale of institutional development required for the establishment of a commodity exchange, the author is skeptical about limiting the government’s role. In the Chicago model, the government’s role is limited to providing the relevant legal framework and oversight functions. Instead, the author advocates an approach in which commodity exchanges are government-run. In making his case, the author compares the experience of two African countries.