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Latent advantage, complex challenges: Industrial policy and Chinese linkages in Ethiopia's leather sector

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  • Brautigam, Deborah
  • Weis, Toni
  • Tang, Xiaoyang

Abstract

Industrial policy is back on the African policy agenda, with a number of countries following new strategies for rapid industrialization. None have done so more eagerly than Ethiopia. The present paper draws on Justin Yifu Lin's framework of New Structural Economics to assess Ethiopia's industrial policies and engagement in the leather industry. Making use of two rounds of semi-structured interviews (2012 and 2015) with all of the foreign firms and more than a dozen local firms in the leather sector, as well as other key stakeholders, it examines seven steps the government took to build the industrial policy: Create a high-level focus on the sector; make strategic use of international development partners; attract a “lead goose” (Chinese) in the footwear sector; build government capacity to support the sector; strengthen business associations; “shock-to-shape” upgrading; improve input supply. Ultimately, while government interventions have led to improvements across several steps of the value chain, the paper identifies a number of factors that have prevented the country from fully realizing a latent comparative advantage in the leather sector.

Suggested Citation

  • Brautigam, Deborah & Weis, Toni & Tang, Xiaoyang, 2018. "Latent advantage, complex challenges: Industrial policy and Chinese linkages in Ethiopia's leather sector," China Economic Review, Elsevier, vol. 48(C), pages 158-169.
    • Handle: RePEc:eee:chieco:v:48:y:2018:i:c:p:158-169
    DOI: 10.1016/j.chieco.2016.06.006
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    References listed on IDEAS

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    1. Tetsushi Sonobe & John E. Akoten & Keijiro Otsuka, 2009. "An Exploration into the Successful Development of the Leather‐Shoe Industry in Ethiopia," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 719-736, November.
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    6. Stiglitz, Joseph E. & Yifu, Justin & Monga, Celestin, 2013. "The rejuvenation of industrial policy," Policy Research Working Paper Series 6628, The World Bank.
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    8. Justin Yifu Lin, 2012. "New Structural Economics : A Framework for Rethinking Development and Policy," World Bank Publications - Books, The World Bank Group, number 2232, December.
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    Cited by:

    1. Zewdie Habte SHIKUR, 2022. "Development And Enterprises’ Labor Demand In Sub-Saharan Africa: Evidence From Panel Data Of Four Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 22(2), pages 109-124.
    2. Grumiller, Jan, 2019. "A strategic-relational approach to analyzing industrial policy regimes within global production networks: The Ethiopian Leather and Leather Products Sector," Working Papers 60, Austrian Foundation for Development Research (ÖFSE).
    3. Matthess, Marcel & Kunkel, Stefanie, 2020. "Structural change and digitalization in developing countries: Conceptually linking the two transformations," Technology in Society, Elsevier, vol. 63(C).
    4. Lindsay Whitfield & Cornelia Staritz & Mike Morris, 2020. "Global Value Chains, Industrial Policy and Economic Upgrading in Ethiopia's Apparel Sector," Development and Change, International Institute of Social Studies, vol. 51(4), pages 1018-1043, July.
    5. Altenburg, Tilman & Chen, Xiao & Lütkenhorst, Wilfried & Staritz, Cornelia & Whitfield, Lindsay, 2020. "Exporting out of China or out of Africa? Automation versus relocation in the global clothing industry," IDOS Discussion Papers 1/2020, German Institute of Development and Sustainability (IDOS).
    6. Alice Nicole Sindzingre, 2021. "Economic Relationships Between Sub-Saharan Africa and China: An Alternative Theoretical and Policy Paradigm?," Post-Print halshs-03625159, HAL.
    7. Hatice ER, 2021. "Academic Aspect of the Leather Industry: An Interpretation from the Perspective of Business Science," Prizren Social Science Journal, SHIKS, vol. 5(1), pages 11-43, April.
    8. Zewdie Habte Shikur, 2020. "Industrial policy measure and economic structure in Ethiopia: the case of Oromia region," International Journal of Economic Policy Studies, Springer, vol. 14(1), pages 255-274, February.
    9. Shahid Yusuf, 2018. "East Asian Cat or African Cat: Which One Is the Better Mouse Catcher?," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 10(1-3), pages 60-72, January.

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