This thesis examines Ghana's failed attempt to develop in an interpretative model of a political economy of decline. The definition of political economy in this thesis stresses the factors influencing decision-making, particularly, the conflicts and power of the interest groups controlling the state. The thesis argues that at the eve of decolonization, there were identified weaknesses which imposed a limitation on the pace of economic development. The most important of these weaknesses was the low and stagnant productivity of the predominant peasant agriculture. By imposing an excessive predatory taxation on the cocoa industry to finance accelerated development, under these conditions, the cocoa sector, whose savings could have supported a moderate pace of development, was destroyed without achieving development. A major economic decline has occurred in Ghana in which the collapse of the cocoa industry has played a significant part. The process of decline has been dominated by political economy conflicts both within interest groups in the urban sector, created by the aborted modernization, and between urban and rural interests. Cocoa supply functions have been generated for different periods over the entire history of the industry, to determine the nature of the decline of that principal economic sector. Short-run and long-run price elasticities in the period before 1955 were found to be negligible. Supply elasticities have increased in recent periods, and have been estimated as follows for the period since 1944: Short-run price: 0.18; Long-run price: 0.42; Short-run capacity base: 0.88; Long-run capacity base: 1.685. The loss of production due to short-run, long-run and very long-run direct and indirect producer price distortions from the equilibrium border price, have been estimated, at the peak, as 40%, 51.5% and 62.6% respectively. The current attempts at economic recovery have concentrated on monetary and fiscal policies and on the export sector. Significant successes have been achieved since 1983, but these are still below performance in 1976. The thesis concludes that the economic recovery programme faces major challenges from two sources. The fundamental problems of the food production sector have so far been ignored. The conflicts in the political economy also remain a major threat to the productive sectors.