Type or paste a DOI name into the text box. Ethiopia has achieved one of the fastest growing economies in developmental state in ethiopia pdf world for the last consecutive years by adopting East Asian countries model of development. Based on developmental state paradigm, the ruling party has been able to design a pragmatic developmental strategy which is tailored and adjusted to the country’s unique socio-economic structure.
The experiment has resulted on unprecedented mobilization of resources and outstanding economic performance in the country’s history. Developmental State refers to a state which makes its primary goal to enhance economical growth and transformation. To achieve these goals developmental state, contrary to neo-liberal paradigm, intervenes and plays a leading role in guiding the direction and pace of economic development. Development is a process of discovery and since every country has uniquely different circumstances, there is no one-size- fit-all model of developmental state and policy to all countries.
However there are general characterizations of developmental state which are basic to all and in all circumstances. First of all developmental state actively intervenes in the economic process to facilitate growth and transformation. Secondly intervention of developmental state is oriented toward less public ownership and usage of set of economical leverage of incentives. These instrumental leverages include such as subsidies, tax breaks, tax credits, importexport control and promotions, targeted financial and credit policies etc. Developmental state encourages and primarily relies on private sector investment not on public funds. Extensive dialog and cooperative engagements with private sector are prerequisite for developmental state. Lastly but not least, developmental state requires a developmental paradigm by which underpinning a social support for its vision of development.
Even though the concept of developmental state at present time mostly associated with East Asian countries such as Japan, Taiwan, Malaysia, South Korea etc, in seventeenth and eighteenth centuries European countries used to the have the same approach toward government role in which government plays an active role in speeding growth and transformation of economy. The establishment of developmental state of Ethiopia happened to be a reaction to a failed ideology of neo liberalism which is vigorously promoted by western countries and their extensions, international organizations, to instill in African countries. Developmental state of Ethiopia is a result of a long journey in searching alternative path of growth which suits the countries immediate and strategic interests. Economic policies which are based on the premises of neo liberalism ideology such as limited government, market fundamentalism, monetarism, and individualism failed short to reflect and resonate with social structure and economic reality of developing countries. The architect of Ethiopian developmental state, late Prime Minister Meles Zenawi, has been a zealous promoter and campaigner for developmental state model of development for the whole African countries. As scholar he has contributed an important theoretical works and analysis on the impediment and adverse impact of neo liberalism on developing economy and made a founded case for the implementation of developmental state in the continent.
The development strategy has been aimed to bring a structural change and transformation of the economy through rapid industrialization and modernization of agriculture. Though Ethiopian developmental state has played an important role in bringing remarkable economic growth in the country, yet it has failed to contain the rampage of rent seeking behavior and practice which is infesting the structure of governmental apparatus at alarming pace. Rent seeking is the attempt to gain access to or control over advantages for receiving rents. In economics, rent-seeking is an attempt to obtain economic rent by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. 14 Rent seeking destructiveness stemming from the fact that it diverges and wastes thenecessary resources which otherwise could be used to fuel the economy.
Mbaku describes the two most important rent seeking behaviors in the developing countries as bureaucratic corruption and political violence. Bureaucratic corruption involves several kinds of activities. Rent seeking poses threat credibility of government itself and can decays government structures and capacity. It is a threat to the legitimacy of government itself and has unmitigated negative effect on the hard work of any nation to achieve political and economic development. Rent seeking repulses investment and discourages foreign aid. Investors see corruption as needless additional cost of doing business.