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Thesis (M.Com. (Development Theory and Policy))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Economic and Business Sciences, 2016 / The role of international trade in countries development process is well documented. In this era of globalisation, the notion of free international trade has dominated both the political and economic discourse. It is presumed that integration of poor countries into the world economy will be advantageous to sustain economic development. A growing number of economists however, doubted the benefit that could emanate by engaging in trade liberalisation most importantly multilateral trade agreements. Primarily because membership necessitates opening up their immature economy to stiff foreign competition. Nevertheless, many developing countries have joined the WTO with its perceive benefits of increasing market access and integration into the global market. Theoretically, both the Classical and Neo-classical trade theories signify the benefits of unrestricted trade towards the development of economies. This research report investigates the rationality or otherwise of Ethiopia’s accession into the WTO. Specifically, the research has looked at the possible economic benefits of joining WTO as a result of increased market access and pinpoint the challenges the country could face with regard to current account BOP disequilibrium. The economic rationale of the integration of developing countries has been closely linked to the benefits to be derived from increasing market size. The study employed secondary data to answer the research questions and reach at conclusion. The results indicate that for the country to be benefited from the increased market access, there is a need to diversify the export basis as well as adding value to the existing export commodities. The trend analysis with regard to BOP current account deficit illustrate that the trade deficit is widening in the recent time. Appropriate measures should be in place to reduce the aggravated BOP disequilibrium. / MT2017

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Since the fall of the Derg regime in 1991, Ethiopia has undergone a remarkable economic transformation. Shunning liberal policy advice yet avoiding the pathologies of patrimonialism, its experience is increasingly presented as an example for others to follow. However, there has been surprisingly little research, and even less consensus, on what actually constitutes this 'Ethiopian model.' The present thesis provides an answer to this question by focusing on the role of the EPRDF - the former insurgency movement which has governed Ethiopia since 1991 - and the fundamental reconstruction of state and market it has overseen. It argues that the resulting political economy is best characterised as a form of 'vanguard capitalism,' which combines the centralising political logic of a Leninist movement party with the expansive logic of capitalist markets. At its base lies the monopolisation of state-society relations by the EPRDF which, in turn, allows for the creation, centralisation and strategic use of economic rents by its administration. The two processes of illiberal state- and market-building are complementary, and their outcomes mutually reinforcing: a state that seeks to derive legitimacy from 'developmental' interventions in the economy, and an economy that advances a particular vision of the Ethiopian state. To bear out this argument, the thesis traces the evolving relationship between party, state, and market through four distinct periods in the EPRDF's Ethiopia. While the administrative and economic institutions built during the wartime years were all subsumed into the movement's thrust toward military victory, structural adjustment during the 1990s led to a gradual differentiation between party, state, and market. The propagation of an Ethiopian 'developmental state' in the early 2000s implied a re-centralisation of economic rents, yet without a corresponding degree of control over society the party was left vulnerable. After the electoral near-defeat of 2005 the EPRDF thus reclaimed its 'vanguard' role, again fusing party, state, and market into a campaign for economic transformation that it presents as a logical extension of the original struggle for liberation. The thesis draws on over one hundred stakeholder interviews conducted during ten months of field research in Addis Ababa, Mekelle, and among the Ethiopian diaspora, as well as on extensive archival research.

The system of cereal grain production in Ethiopia has been stratified into private, cooperative and state farms since the 1975 land reform. The private farms are being gradually replaced by the cooperative farms while the state farms are receiving increased technical and budgetary assistance by the Ethiopian government. lt is, however, not clear if these policies are consistent with the technical characteristics of these three modes of production. This study, therefore, evaluated technical efficiency, impacts of known and latent input factors, and returns to scale parameters for each farm type. Sample data were collected from Ethiopia on five cereal crops, namely, barley, com, sorghum, teff and wheat and several input factors, including labor, land, oxen, traditional farm implements, tractors, machinery services, modern yield·increasing inputs, livestock, education and rainfall over 77 awrajjas for the 1980-1986 production period. A covariance regression model was applied with these data to determine an appropriate functional form between the Cobb-Douglas and translog production functions. The Translog functional form was selected for the analysis on the basis of statistical tests. Results of the analysis suggest that the producer cooperatives collectively appear to have a potential to generate increased gross income per hectare at a declining rate with respect to an equiproportionate increase in all inputs, except land, upon an increasing average cost of production per unit of cereal output. The private and state farms appear to be operating with a close to fixed proportions type of production technology with a constant average cost of production per unit of cereal output per hectare. Moreover, the range of substitutability between input factors tends towards a complementary relationship as the institutional transformations and management techniques of the cereal producing farms shift from the traditional to a more advanced and centrally managed state mode of production. Partial income elasticity parameters suggest that (a) the private sector’s gross income per hectare is most responsive to traditional hand tools, fertilizer, labor, human capital at primary level of education, and rain in August and September; (b) the cooperative sector’s gross income per hectare is most responsive to the use of tractors and September rain; whereas (c) gross income per hectare of the state farms is most responsive to the use of traditional labor, machinery services and rain in June and August. Thus, Ethiopia’s agricultural income production per hectare is likely to be revitalized by: (a) qualitative changes in the traditional inputs, water management, and introduction of modem technical inputs such as fertilizer and farmer education in the private sector; (b) increased traditional labor employment, improved management of water, machinery and modem yield-increasing inputs on the state farms; and (c) a better usage of tractors and collaborative input factors, improved water management, and a substantial increase in capital investment to achieve full employment of the seemingly redundant labor and oxen input factors on the cooperative farms. It seems unlikely that the producer cooperatives will achieve the goal of maximum cereal output per hectare with the most prevalent composition of the redundant traditional input factors which contribute insignificantly at the margin without a major change in the current production techniques and structural policies of the sector. / Ph. D.

This thesis explores the relationship between identity, social interaction, and social practice, through a case study of young diasporans of Ethiopian origin (YDEOs) from North America and their engagements in Ethiopian development initiatives. Specifically, I examine the ways in which people of Ethiopian descent born and/or raised in Canada and the U.S. construct a diasporic identity and engage with Ethiopian development initiatives through a mutually constitutive process. My methods were qualitative and involved conducting semi-structured in-depth interviews with 55 YDEOs and attending 8 community events in Toronto, Washington, D.C., and Addis Ababa. All of the YDEOs I interviewed had actively engaged in initiatives (based in North America or Ethiopia) intended to contribute towards the social, political, and/or economic development of Ethiopia. Their initiatives included fundraising events, establishing local NGOs, volunteer missions, and taking professional positions within the Ethiopian development sector, among others. Utilising an interactionist theoretical framework, I unpack YDEO motivations for engaging in Ethiopian development, the nature of the development activities themselves, and the ways in which these experiences have shaped YDEO relationships, identities, and trajectories in life so far. Engaging in Ethiopian development was rarely expressed as an extension of a pre-existing sense of Ethiopian patriotism; rather, YDEOs used these practices to explore, test, or build a sense of connection to their country of origin. Further, the development framework made it possible for them to forge a relationship that also resonated with their other social identities, and could even be leveraged to further other personal and professional goals. YDEO engagements in Ethiopian development were not simply interventions; they were fundamentally social processes defined by social interactions. In the process of organising fundraising events, volunteering at orphanages, and working on project reports, YDEOs were also building personal connections, gaining social capital, and redefining attitudes towards their families, communities, development, and Ethiopia itself. This thesis contributes an in-depth and critical analysis of the diaspora/development nexus - a nexus that emerges as a contested space, where people act and are acted upon, where identities are reified and transformed, and where institutions and social structures are both strengthened and challenged. The insights from migrant descendant experiences, such as YDEOs, highlights the ways in which diasporic identities take shape and are imbued with meaning through social practice, and how these practices are connected to broader human psychosocial needs, aspirations, and behaviours.

I demonstrate that household investments in children's education in Ethiopia are affected by parents' self-beliefs (such as their locus of control), parents' aspirations for children's educational attainment, children's conceptions of their roles and identities in the household and at school, and children's own preferences, all concepts not widely studied in development economics. Two empirical chapters report on a field experiment in which randomly selected adults watched documentaries about role models who were poor but succeeded in agriculture or small business. Six months later, parents' self-beliefs and aspirations for children's education were higher in the treatment than in the placebo and control groups. Enrolment of children in school, spending on education, saving and use of credit also increased. A third empirical chapter draws on longitudinal qualitative research to argue that children's preferences for their time allocation between work and school are strongly influenced by the desire to comply with valued identities as students and as independent earners and contributors to the household. The fourth chapter suggests that understanding children's preferences might improve predictions about their reaction to education policies. The literature predicts an increase in time in school will not improve test scores: children will reduce effort because they desire a limited amount of learning. I find a reform to lengthen the Ethiopian primary school day improves test scores. Although this could occur through many mechanisms, one possibility is that children do not prefer to limit their desired amount of learning. This suggests that better evidence on children's preferences might improve prediction of the effects of policies to alter school inputs. The conclusion reflects on whether the empirical relevance of concepts of self-beliefs, aspirations and identities implies that assumptions in standard models of decision-making in economics about the characteristics of beliefs and preferences ought to be rejected. I argue that these ideas can be captured by existing economic concepts of beliefs and preferences and by standard assumptions about these concepts. I suggest that, contrary to recent accounts building on human capital theory, self-beliefs should be viewed as beliefs, not non-cognitive skills. I consider aspirations as a type of preference, shaped by both objective constraints and self-beliefs. I consider identity as a preference for complying with a social role, but highlight that such preferences are often altruistic, rather than self-interested. In conclusion, I argue that economics should draw further on other social sciences, including psychology, to develop substantive theories of the formation and characteristics of beliefs and preferences. Doing so will suggest when it is appropriate to apply standard models and how their assumptions can be modified if their predictions do not hold.