Problems of monetary management in East-Africa 1961 – 1970

Abstract

This paper provides an overview of the role of monetary and credit policy in the context of the East African Community. The research starts off with an introductory chapter on monetary theory and the extent of its applicability to developing countries. The theoretical framework is based on institutional and structural assumptions relevant to developed countries. As the economic structure of the developing countries is different from that of the developed countries, these assumptions would not hold in the context of the former. For this reason the application of the monetary theory to developing countries is limited. This is not to say that analytical approaches of the monetary theory are of no value to the study of the monetary problems of developing countries. It is only to emphasize that the assumption of general validity of monetary theory is challenged by the very fact that sharp structural and institutional differences do exist between developed and developing countries.