Paper short abstract:

The paper explores converging industrial development strategies in Ethiopia and Vietnam. Despite growing similarities at the level of policy, however, it finds that important differences, including in the form of state-business relations, shape each regime's prospects for industrial policy success.

Paper long abstract:

This paper explores the overlooked convergence of developmental strategies, particularly industrial policies, in two contemporary late developers: Ethiopia and Vietnam. For all their differences in terms of geography, political systems and current income levels, it is suggested that the two countries share important commonalities across their basic socio-economic features, transitional economic histories, and domestic political economies. Further, both are notable for making rapid economic and social advances from positions of extreme poverty and vulnerability, and are governed by ruling regimes that have placed considerable policy emphasis on spurring manufacturing development during the transition from centrally planned to market economy. Drawing on PhD research, this paper argues that common features of their underlying political economies have notably driven the ruling regimes in Ethiopia and Vietnam to embrace strikingly similar strategies for rapid state-led development in the context of current global conditions. The basis of this common strategy is the attempt to combine significant levels of state ownership with sizeable levels of foreign investment in order to further the expansion of national manufacturing capacity. Yet it is also argued that despite this growing policy convergence, important differences also condition each regime's prospects for industrial policy success. The balance of social forces prevailing within Ethiopia and Vietnam differs in important respects, especially in terms of the prevalent form of state-business relationships. The result is that despite similar strategies, prospects for success in each country differ on account of the evolving class interests and the political economies in which these developmental policies are embedded.