The developmental state seen through the prism of an emergence of a domestic industrialist class in Ethiopia
Sibulele Nkunzi (University of the Witwatersrand)
Paper short abstract:
When managerial and corruption problems surfaced at Ethiopia's Metals and Engineering Corporation and endangered the very life of the corporation, a pocket of bureaucratic effectiveness from within and its linkages to outside institutions kept the momentum of learning-by-doing and upgrading going.
Paper long abstract:
The paper on aims to critically assess the dominant discourse for the recent decline in Ethiopia's biggest large scale industrial enterprise, the Metals and Engineering Corporation (METEC), which are based on neoclassical notions. Rather, the decline can be better examined through the prism of a political-economy framework. In the beginning, the distribution and monopoly rents were translated into learning and catch-up, improvements in productivity, capability-building and upgrading, and ultimately the rents were generated directly from the production system. This was largely a function of how the state distributed the rents and how it related to METEC as the recipients and how METEC's operations were carried out. Overtime, however, managerial troubles surfaced and endangered the very existence of the conglomerate: top officials began using their political and bureaucratic power to execute functions outside of the realm of METEC's mandate, flouted procurement and financial procedures, embezzled funds out of the corporation, and technical complacency ensured. However, the initial "pockets of bureaucratic effectiveness" were not completely eroded since there remained a level of industrial learning in particular segments of the corporation, which may not be optimal or ideal, but might not have been/be achieved through foreign technology transfer. This was driven by small remnant of small bureaucratic enclaves from both within METEC and client institutions who performed specific functions - having incentives and pressures to push against the floodtide of mismanagement and corruption, and the will to build the industrial capacity necessary for the execution of industrialization in the Ethiopian developmental state.
- Transnational political economies of development