IDEAS home Printed from https://ideas.repec.org/p/cid/wpfacu/423.html
   My bibliography  Save this paper

Development in a Complex World: The Case of Ethiopia

Author

Listed:
  • Ricardo Hausmann

    (Harvard's Growth Lab)

  • Tim O'Brien

    (Center for International Development at Harvard University)

  • Timothy Cheston

    (Center for International Development at Harvard University)

  • Ibrahim Worku Hassen

    (Center for International Development at Harvard University)

  • Can Soylu
  • Kishan Shah

    (Center for International Development at Harvard University)

  • Nikita Taniparti

    (Center for International Development at Harvard University)

  • Pankhuri Prasad

    (Center for International Development at Harvard University)

  • Pablo Andrés Neumeyer

Abstract

This research compendium provides an explanation of Ethiopia’s fundamental economic challenge of slowing economic growth after an exceptional growth acceleration — a challenge that has been compounded by COVID-19, conflict, and climate change impacts. Ethiopia has experienced exceptional growth since the early 2000s but began to see a slowdown in the capacity of the economy to grow, export, and produce jobs since roughly 2015. This intensified a set of macroeconomic challenges, including high, volatile, and escalating inflation. This compendium identifies a path forward for more sustainable and inclusive growth that builds on the government’s Homegrown Economic Reform strategy. It includes growth diagnostics and economic complexity research as well as applications to unpack interacting macroeconomic distortions and inform diversification strategies. Drawing on lessons from past success in Ethiopia and new constraints, this compendium offers insights into what the Government of Ethiopia and the international community must do to unlock resilient, post-conflict economic recovery across Ethiopia. The research across the chapters of this compendium was developed during the Growth Lab’s research project in Ethiopia from 2019 to 2022, supported through a grant by the United States Agency of International Development (USAID). This research effort, which was at times conducted in close collaboration with government and non-government researchers in Ethiopia, pushed the boundaries of Growth Lab research. The project team worked to understand to intensive shocks faced by the country and enable local capability building in the context of limited government resources in a very low-income country. Given the value of this learning, this compendium not only discusses challenges and opportunities in Ethiopia in significant detail but also describes how various tools of diagnostic work and economic strategy-building were used in practice. As such, it aims to serve as a teaching resource for how economic tools can be applied to unique development contexts. The compendium reveals lessons for Ethiopian policymakers regarding the country’s development path as well as numerous lessons that the development community and development practitioners can learn from Ethiopia.

Suggested Citation

  • Ricardo Hausmann & Tim O'Brien & Timothy Cheston & Ibrahim Worku Hassen & Can Soylu & Kishan Shah & Nikita Taniparti & Pankhuri Prasad & Pablo Andrés Neumeyer, 2022. "Development in a Complex World: The Case of Ethiopia," CID Working Papers 423, Center for International Development at Harvard University.
    • Handle: RePEc:cid:wpfacu:423
    as

    Download full text from publisher

    File URL: https://growthlab.cid.harvard.edu/sites/projects.iq.harvard.edu/files/growthlab/files/2022-11-cid-wp-423-ethiopia-compendium.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stefan Dercon & Daniel O. Gilligan & John Hoddinott & Tassew Woldehanna, 2009. "The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1007-1021.
    2. Chaoran Chen & Diego Restuccia & Raul Santaeulalia-Llopis, 2022. "The Effects of Land Markets on Resource Allocation and Agricultural Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 45, pages 41-54, July.
    3. Torfinn Harding & Beata S. Javorcik, 2011. "Roll Out the Red Carpet and They Will Come: Investment Promotion and FDI Inflows," Economic Journal, Royal Economic Society, vol. 121(557), pages 1445-1476, December.
    4. Iimi,Atsushi & Mengesha,Haileyesus Adamtei & Markland,James & Asrat ,Yetmgeta & Kassahun,Kefargachew, 2018. "Heterogeneous impacts of main and feeder road improvements : evidence from Ethiopia," Policy Research Working Paper Series 8548, The World Bank.
    5. Krishnan, Pramila & Patnam, Manasa, 2013. "Neighbours and Extension Agents in Ethiopia: Who matters more for technology diffusion?," CEPR Discussion Papers 9539, C.E.P.R. Discussion Papers.
    6. Bachewe, Fantu N. & Berhane, Guush & Minten, Bart & Taffesse, Alemayehu S., 2018. "Agricultural Transformation in Africa? Assessing the Evidence in Ethiopia," World Development, Elsevier, vol. 105(C), pages 286-298.
    7. Ricardo Hausmann & César Hidalgo, 2011. "The network structure of economic output," Journal of Economic Growth, Springer, vol. 16(4), pages 309-342, December.
    8. Mr. Simon T Gray, 2021. "Recognizing Reality—Unification of Official and Parallel Market Exchange Rates," IMF Working Papers 2021/025, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gebresilasse, Mesay, 2023. "Rural roads, agricultural extension, and productivity," Journal of Development Economics, Elsevier, vol. 162(C).
    2. Tesfaye, Wondimagegn & Tirivayi, Nyasha, 2020. "Crop diversity, household welfare and consumption smoothing under risk: Evidence from rural Uganda," World Development, Elsevier, vol. 125(C).
    3. Chen, Zhao & Poncet, Sandra & Xiong, Ruixiang, 2017. "Inter-industry relatedness and industrial-policy efficiency: Evidence from China’s export processing zones," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 809-826.
    4. G.T. Abate & Tanguy Bernard & Simrin Makhija & David J. Spielman, 2019. "Accelerating technical change through video-mediated agricultural extension: Evidence from Ethiopia," Working Papers hal-02879823, HAL.
    5. Josephson, Anna Leigh & Michler, Jeffrey D., 2015. "To Specialize or Diversify: Agricultural Diversity and Poverty Persistence in Ethiopia," 2015 Conference, August 9-14, 2015, Milan, Italy 212459, International Association of Agricultural Economists.
    6. Berhane, Guush & Abate, Gashaw T. & Wolle, Abdulazize, 2021. "Agricultural Intensification in Ethiopia: Trends and Welfare Impacts," 2021 Conference, August 17-31, 2021, Virtual 315313, International Association of Agricultural Economists.
    7. Abate, Gashaw T. & Dereje, Mekdim & Hirvonen, Kalle & Minten, Bart, 2020. "Geography of public service delivery in rural Ethiopia," World Development, Elsevier, vol. 136(C).
    8. Purnima PUROHIT & Katsushi S. Imai & Kunal Sen, 2017. "Do Agricultural Marketing Laws Matter for Rural Growth? Evidence from the Indian States," Discussion Paper Series DP2017-17, Research Institute for Economics & Business Administration, Kobe University.
    9. ELOUHICHI Kamel & TEMURSHOEV Umed & COLEN Liesbeth & GOMEZ Y PALOMA Sergio, 2019. "Upscaling the productivity performance of the Agricultural Commercialization Cluster Initiative in Ethiopia," JRC Research Reports JRC117562, Joint Research Centre.
    10. Ben Brunckhorst, 2020. "Rural Mobility and Climate Vulnerability: Evidence from the 2015 Drought in Ethiopia," CSAE Working Paper Series 2020-17, Centre for the Study of African Economies, University of Oxford.
    11. Leuveld, Koen & Nillesen, Eleonora & Pieters, Janneke & Ross, Martha & Voors, Maarten & Wang Sonne, Elise, 2018. "Agricultural extension and input subsidies to reduce food insecurity. Evidence from a field experiment in the Congo," MERIT Working Papers 2018-009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. Michler, Jeffrey D. & Josephson, Anna L., 2017. "To Specialize or Diversify: Agricultural Diversity and Poverty Dynamics in Ethiopia," World Development, Elsevier, vol. 89(C), pages 214-226.
    13. Verkaart, Simone & Munyua, Bernard G. & Mausch, Kai & Michler, Jeffrey D., 2017. "Welfare impacts of improved chickpea adoption: A pathway for rural development in Ethiopia?," Food Policy, Elsevier, vol. 66(C), pages 50-61.
    14. Jacopo, Bonan & Stefano, Pareglio & Valentina, Rotondi, 2015. "Extension Services, Production and Welfare: Evidence from a Field Experiment in Ethiopia," Working Papers 312, University of Milano-Bicocca, Department of Economics, revised 30 Oct 2015.
    15. Barbier, Edward B., 2020. "Is green rural transformation possible in developing countries?," World Development, Elsevier, vol. 131(C).
    16. Eslam A. Hassanein & Nagwa Samak & Salwa Abdelaziz, 2024. "The synergetic effect of economic complexity and governance on quality of life: policy thresholds," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-20, December.
    17. Minten, Bart & Stifel, David & Tamru, Seneshaw, 2018. "Structural transformation of teff markets," IFPRI book chapters, in: The economics of teff: Exploring Ethiopia’s biggest cash crop, chapter 12, pages 301-325, International Food Policy Research Institute (IFPRI).
    18. Emmanuel Olatunbosun Benjamin & Oreoluwa Ola & Hannes Lang & Gertrud Buchenrieder, 2021. "Public-private cooperation and agricultural development in Sub-Saharan Africa: a review of Nigerian growth enhancement scheme and e-voucher program," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(1), pages 129-140, February.
    19. Michael A. Clemens, 2017. "The Meaning Of Failed Replications: A Review And Proposal," Journal of Economic Surveys, Wiley Blackwell, vol. 31(1), pages 326-342, February.
    20. Kevin S. Nell & Maria M. De Mello, 2019. "The interdependence between the saving rate and technology across regimes: evidence from South Africa," Empirical Economics, Springer, vol. 56(1), pages 269-300, January.

    More about this item

    Keywords

    Ethiopia;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cid:wpfacu:423. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chuck McKenney (email available below). General contact details of provider: https://edirc.repec.org/data/ciharus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.