The political economy of industrial policies in Ethiopia: structural change, policy process and the role of donors

Abstract

This study analyses the process of design and implementation of the Integrated Agro-Industrial Parks Programme, which the Ethiopian government has identified as one of the main pillars to achieve agricultural modernisation, rural industrialisation and ultimately the structural transformation of the economy and society in the country. The experience of the Integrated Agro-Industrial Parks is a telling case of the Ethiopian political economy. Hence, the research adopts a political economy perspective to argue that the regime change of 2018, following 2 and a half years of social unrests, opened a window of opportunity for a more constructive policy dialogue that allowed development partners to effectively promote new ideas and government officials to test them. In particular the idea that industrial policy targeting structural change should be designed and implemented adopting a multi-stakeholder and participatory perspective, rather than through the conventional dirigiste, top-down approach that has characterised the Ethiopian developmental state since the late Nineties. Some policy lessons and remarks are drawn in the conclusions. The methodology of research involves a case study through which I have conducted an in-depth analysis of the design and implementation process of four pilot Integrated Agro-Industrial Parks. The analysis is grounded in original empirical research based on participant observation (as I have been involved in the process since 2014, first as representative of the Italian Development Cooperation then as technical advisor on behalf of UNIDO) and semi-structured interviews of key stakeholders.