Ethiopia – Growth sustaining institutions?

Fredrik's blog

Ethiopia – Analysis of growth sustaining institutions, between 1991 and 2013.

 By Fredrik Utesch – MSc Candidate in Business Economics in Emerging & Developing Markets – University of Reading

1.     Introduction

The development of growth-sustaining institutions[1] can be seen as a critical landmark in a country’s development. In this essay’s period of observation (1991-2013), Ethiopia experienced four growth accelerations[2]. All of these growth spurts, however, happened before 2004. Thus, the question is if Ethiopia’s institutions reached a level of growth sustaining institutions, as defined by Rodrik (2004).

In the first part of the essay I will highlight background information on Ethiopia’s growth spurts. This is followed by an analysis of Ethiopia’s institutions regarding Rodrik’s taxonomy of market sustaining institutions[3]. This second part also includes an analysis of each subdivision’s impact on economic incentives set. In the final section, I will draw conclusions of this essay.

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