On the growth tragedy of Sub-Saharan Africa and the Free-Trade policy Prescription for these Nations as analytical Review: In reference to Ethiopia

Course ID
Ethiopian Economics Association (EEA)
Asmare Yalew


In spite of the empirical and theoretical controversies among the economists, poor nations like Ethiopia are urged to pursue international trade-driven development policy path: liberalisation, deregulation, privatisation, etc., effected through Structural Adjustment Programmes (SAPs) and other arrangements. Liberalisation (removal of boarder barriers), privatisation and the emergence of new forms of regulation are, nonetheless, central to globalisation (Picciotto 2002: 5). The ultimate desire in realising competitive market-led world (globalisation) is rather to make good market access for the goods and services of developed nations (example Morrissey and Filatotchev 2000; Hoekman and Holmes 1999). The principal query with this review paper is: what do we economists (particularly those from the region) have to say towards the promotion of this development policy path for poor and illiterate dominated and ill economic environment nations such as Ethiopia? Do we have theoretical rationales and acquiesces to honour the policy for Ethiopia, taking into account the institutional deficiencies, behavioural and skill factors, physical resources, technological grids, etc., of the nation? Growth is a long-run process, policies based on the short-run conception of growth cause distortions in resource allocation and factor accumulation, thereby economic retardation. It is also apparent that policies that ignore the realities of an economy, the behaviour and aspirations of the economic agents and appropriate time frames will not succeed, no-matter they base accurate information and parameter estimates. A ten-or-twenty year period growth loss due to erroneous (short-run based) policies can have a dramatic effect. The attempt to move Russia and other former communist countries to a new steady state by following an agenda that is not well founded in realistic details may lead to negative results (Mundlak 2000). And this paper gears to subsume and evaluate the growth shortfalls accounted by various economists and the promotion of the trade-driven development path to the poor SSA nations in general and Ethiopia in particular, from the perspective of literature empirical evidences (the development histories of rich nations and experience of poor SSA with the imposed policy prescriptions), from the literature, the developments in economic growth theories (including the new institutional economics) and the theory of trade. What will be the end of the time equilibrium situation of this poor nation under the free trade-driven development policy path and the spirit of globalisation? Would the traditional subsistence households and the destitute mass be benefited or would they rather be evicted from resource ownership and living? In sum, how can we expound the policy prescriptions and the likely outcomes from the perspective of economics and development empirics

Corporate Author: Alemayehu Seyoum(Editor) & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher: Ethiopian Economic Association (EEA)
Primary Descriptors:

Free trade

Secondary Descriptor:


Geographic Descriptors: Ethiopia; Sub-Saharan Africa
Cataloge Date: 02/27/2013
Broad Subject heading: GROWTH AND DEVELOPMENT
Call Number: 330.963 PRO 2004
Serial Key Title: Proceedings of the First International Conference on the Ethiopian Economy
Publication catagory: International Conference
Content type: EEA Publication
Volume: I
Publication date: 2013-05-27 00:00:00
Forum or Discussion date: 2013-02-27 00:00:00
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annualy
Author: Asmare Yalew