PEconGrwothEthALEMAYEHU-FinalEditedVer11MayG_NTchange_ShortVer.pdf

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See discussions, stats, and author profiles for this publication at: The Political Economy of Growth, Poverty and Inequality in Ethiopia, 2000–2013 Chapter · September 2014 CITATION 1 READS 813 2 authors: Some of the authors of this publication are also working on these related projects: The Fiscal Response to Foreign Aid, FDI-Growth Nexus, Global Macroeconometric Modelling View project Alemayehu Geda Addis Ababa University 91 PUBLICATIONS 460 CITATIONS SEE PROFILE Addis Yimer Addis Ababa University 14 PUBLICATIONS 8 CITATIONS SEE PROFILE All content following this page was uploaded by Alemayehu Geda on 18 July 2014. The user has requested enhancement of the downloaded file.
Growth, Poverty and Inequality in Ethiopia, 2000-2013: A Macroeconomic Appraisal Alemayehu Geda Addis Yimer Department of Economics Addis Ababa University May, 2014 (A Chapter in Book to be Published by Forum for Social Studies, FSS) Introduction Official government reports on growth, poverty and inequality show that Ethiopia has registered a two-digit rate of growth in the last decade and has made immense progress in poverty reduction. In terms of poverty, the official reports indicate that the head count ratio of poverty (the percent of population below the poverty line) has declined from 45 percent in 1994/95 to 30 percent in 2010/11. If we base our analysis on this data, this is an impressive record. However, a cursory look at people‘s livelihoods across the country (including Addis Ababa) reveals that things are not as rosy as it is made out in the official reports and that many are unable to sustain themselves, especially following the rampant inflation that began in 2005. This observation is in line with the findings of the multidimensional poverty measure discussed later in this chapter. Notwithstanding this, however, there is no scientific or independent basis to substantiate or challenge the official claim. Thus, the task of an independent observer is daunting. The best he/she can do is to critically examine the evidence in the light of empirical observations and alternative measures of poverty, and come up with the most likely state of growth, poverty and inequality in the country. In this chapter we will attempt to do that. The political economy of growth, poverty and inequality is a sensitive and difficult subject in today‘s Ethiopia, partly because of the lack of accurate information and the uncertainty surrounding initiating dialogue on the subject. Notwithstanding this, in this work, we will attempt to do the following. First, in the face of conflicting information and data unreliability regarding the country‘s growth and development , it is imperative to make an educated guess of what is the most likely state of growth in the last decade. This is done in the next section. In the remaining sections we shall examine the nature of poverty, the implications of the reported growth on poverty and inequality, and finally, by way of conclusion, how growth, poverty and inequality are generally evolving and are related to the politics of the country.

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