Constraints on the Effectiveness of Structural Adjustment Packages in the Production and Availability of Pharmaceutical Products in Kenya

  • Pius Owino


According to the orthodox adjustment programmes, depreciation of the real exchange rate (RXR), ceteris paribus, induces price incentives in favour of the production and export of Tradable (T) goods relative to non-tradable (N) goods. Trade liberalisation is supposed to reduce protection and improve economic efficiency, while reduction in government spending offsets the inflationary impact of devaluation. In practice, however, many constraints offset these intended objectives. This chapter aims to highlight these constraints by examining the impact of these three policy instruments on the production and availability of pharmaceutical products (PPs) in Kenya. To start with, we examine whether price incentives make the production and export of T goods including PPs more profitable relative to N goods.


Gross Domestic Product Real Exchange Rate Trade Liberalisation Health Spending Good Sector 
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© Charles Harvey 1996

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  • Pius Owino

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