The Impacts Of Labour Market Liberalisation And Government Commitment To Reform: Zimbabwe, 1991-2000

This paper analyses labour market liberalisation and government commitment to economic reforms in Zimbabwe. The paper briefly analyses the economic policies that were implemented between 1980 and 1990 that were characterised by massive interventions in the labour market. It problematises the economic problems faced then, and examines how these persuaded the government to implement economic reforms in 1991. Economic reforms in this paper are synonymous with structural adjustment programmes of the IMF and the World Bank. The reforms included liberalisation of the controls that inhibited employment in the economy. While pointing out that the reform period was 1991 to 1996, it argues that the period up to 1999 must be analysed as reform period because of the active involvement of the IMF in economic policy formulation. The paper analyses the extent to which labour market liberalisation affected employment and wages. It briefly explores the impact of the reforms on allocative and dynamic efficiencies and income distribution. It also analyses the performance of the economy over the period after the reforms to establish the importance of government commitment to the success and/or failure of reforms. It concludes that economic reforms in Zimbabwe had adverse impact on employment (both quality and quantity) and wages. Furthermore, government commitment to reform is critical both for the full implementation of the reforms and for the realisation of the expected benefits of the reforms.