Explaining African Economic Growth Performance: The Case of Ethiopia

"This paper attempts to unravel the factors behind the growth performance in Ethiopia. This is done first by attempting to place growth in Ethiopia in its political economy and historical context. This historical review helped to categorize the growth experience of the last four decade into three regimes. This is followed by an attempt to characterize the growth record in the past four decades, outlining the most important episodes of growth in each sub-period. We dealt with issues of growth accounting and structural change and discussed their implications. An attempt to understand the source of growth using information from cross-country growth regression is also made. The Growth performance in the three periods is then examined by analyzing the role of institutions, microeconomic level agents behavior as well as the nature of product and factor markets. The main conclusions that emerged from this analysis are: Growth performance in Ethiopia is largely determined by political economy factors, vagaries of nature; strength and efficiency of institution, efficacy of public policies, and risk related to war and property ownership."