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Submitted by Berhanu on
Anonymous is right in suggesting that a counterfactual analysis would be more enlightening (but much harder) than selective comparisons. Let me give you a couple examples to ponder: 1. The Bank's road sector and education sector reviews show that both the mileage of paved roads and enrollments in primary schools doubled between the beginning and the end points of each of the three postwar regimes: Imperial, Derg, and EPRDF. 2. The evolution of per capita income during 1960-2005 shows that the peak reached in 1972 (Imperial) was regained only in 2005 (EPRDF). Note that Imperial benefitted from a stable global climate and pro-market policies, the Derg had to grapple with inherited civil wars, and the EPRDF benefitted from peace, massive aid flows and market-oriented reforms. Growth in per cap income has increased markedly in the past five years--led by demand in the public/service sectors. What such trends suggest is that (a) there is no robust growth engine in Ethiopia that is anchored in rising productivity in agriculture and industry; and (b) successive regimes had to deal with the legacies of the monumental structural bottlenecks and policy failures of previou governments. Given the centuries-old Malthusian trap for initial condition, they had to leverage policy to build up capacity, expand opportunities and, most importantly, flexibly sync the two. This challenge makes it hard to undertake objective counterfactuals since policymakers do not have enough autonomy to deserve full blame or credit for economic performance while in office. Until the country produces a development-committed leadership that enjoys the trust of all fundmantal interests of society, state elites will continue to engage in redistributive contests over the meager agricultural surplus (as in the past millenium) and foreign aid collected in the name of the very people they have pauperized. BTW, why do donors insist that "pro-poor" policies automatically translate into long-term development? One can eliminate poverty (say, $2/day) via massive transfers, but without building up the capacity of the economy for sustained and shared growth. Berhanu