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The Effects of Rent-seeking in Dissipating Developmental Efforts: The Ethiopian Experience
International Journal of Business and Management Tomorrow (2012)
  • Asayehgn Desta, School of Business and Leadership, Dominican University of California
The liberalization measures in Ethiopia for the last seven years have contributed to strong economic growth which has lifted the economic and social well-being of at least some of the more fortunate Ethiopians. The majority of Ethiopians, however, have remained at the margin of this process, failing to share the benefits of economic growth. To tackle the chronic poverty and rampant unemployment that the country is facing, policy makers have attempted more recently to retool the country"s economic structure to mirror the East Asian Developmental State economic model. To rekindle hope for Ethiopia"s economic future, Ethiopia"s Developmental State Model has been guided by very strong government intervention in the market, giving power and authority to the government bureaucracy to plan, supervise, and implement the developmental processes of the country. If the Ethiopian functionaries had been willing to operate efficiently to address the economic challenges of the country and if government intervention had been implemented carefully, there is little doubt that these plans would have generated the greatest welfare for the largest numbers of Ethiopians. However, one of the missing preconditions that caused the failure to adopt sound developmental policies in Ethiopia was the lack of consideration of the prevalence of rent-seeking behavior. Thus, if the Ethiopian government wants to see the implementation of its well-designed reform packages, it has to give up the Developmental State paradigm which has become synonymous with rent-seeking. Instead, it has to entertain the Employer as the Last Resort (ELR) model of development.
Publication Date
January, 2012
Citation Information
Asayehgn Desta. "The Effects of Rent-seeking in Dissipating Developmental Efforts: The Ethiopian Experience" International Journal of Business and Management Tomorrow Vol. 2 Iss. 1 (2012)
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