Costs and Causes of Zimbabwe's Crisis

July 20, 2005

Zimbabwe has experienced a precipitous collapse in its economy over the past five years. The purchasing power of the average Zimbabwean in 2005 has fallen back to the same level as in 1953. For people in extreme poverty, a collapse like this translates directly into sickness and death. We conservatively estimate that persistence in the economic shock will cost the lives of at least 3,900 Zimbabwean children per year—about half the infant death toll from HIV/AIDS. The government blames its economic problems on external forces and drought. We assess these claims, but find that the economic crisis has cost the government far more in key budget resources than has the donor pullout. We show that low rainfall cannot account for the shock either. This leaves economic misrule as the only plausible cause of Zimbabwe’s economic regression, the decline in welfare, and unnecessary deaths of its children.

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