The case for industrial policy and its application in the Ethiopian cut flower sector
The floriculture industry has been one of the most spectacular growth successes in Ethiopia. It has been driven by a dynamic mixture of government action, foreign investment, and local entrepreneurship. We build the case for the use of innovate industrial policy regimes to support processes of structural transformation in low income countries. Further to this, we demonstrate how a complex array of state institutions helped support private-sector engagement and success in floriculture. However this success in floriculture has been erratic, and at times, very costly. Using a mixed methods approach, we trace past and present bottlenecks in the evolution of the sector. In particular we show that the regulatory framework facing the sector needs continuous reform in order to meet the requirements at each specific stage of growth. Moreover, the sector faces an increasingly challenging external environment in international markets and will need substantial levels of government support in the medium and future term, in particular to access new markets, and to defend and expand market share in existing ones. High labour turnover, driven mostly by the lure of labour migration to the Middle East, shortage of land for expansion around Addis Ababa, and the unpredictability of the regulatory environment, all remain challenges for this sector. We assess the severity of each major bottleneck for future growth and performance of the flower sector, and propose ways to alleviate them. We recommend that the government strives to make sector regulation more transparent, predictable and responsive, and that support in marketing and market research is raised to a higher level. For firms in the sector, we recommend strengthening the dialogue with the labour force and to improve working conditions in order to retain workers, which we believe could be achieved without significant reduction in profitability given the extremely low share of wages in total production costs.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Westphal, Larry E., 2000. "Industrialization Meets Globalization : Uncertain Reflections on East Asian Experience," UNU-INTECH Discussion Paper Series 8, United Nations University - INTECH.
- Sen, Kunal, 2013.
"The Political Dynamics of Economic Growth,"
Elsevier, vol. 47(C), pages 71-86.
- Kunal Sen, 2012. "The political dynamics of economic growth," Brooks World Poverty Institute Working Paper Series esid-005-12, BWPI, The University of Manchester.
- Justin Lin & Ha-Joon Chang, 2009. "Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy it? A Debate Between Justin Lin and Ha-Joon Chang," Development Policy Review, Overseas Development Institute, vol. 27(5), pages 483-502, September.
- Mkandawire, Thandika, 2001. "Thinking about Developmental States in Africa," Cambridge Journal of Economics, Oxford University Press, vol. 25(3), pages 289-313, May.
- Justin Yifu Lin, 2012. "New Structural Economics : A Framework for Rethinking Development and Policy," World Bank Publications, The World Bank, number 2232, December.
- Erik S. Reinert, 2009. "Emulation versus Comparative Advantage: Competing and Complementary Principles in the History of Economic Policy," The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics 25, TUT Ragnar Nurkse School of Innovation and Governance.
- Morten Jerven, 2011. "The quest for the African dummy: explaining African post‐colonial economic performance revisited," Journal of International Development, John Wiley & Sons, Ltd., vol. 23(2), pages 288-307, March.
- Pack, Howard & Westphal, Larry E., 1986. "Industrial strategy and technological change : Theory versus reality," Journal of Development Economics, Elsevier, vol. 22(1), pages 87-128, June.
- Mano, Yukichi & Yamano, Takashi & Suzuki, Aya & Matsumoto, Tomoya, 2011. "Local and Personal Networks in Employment and the Development of Labor Markets: Evidence from the Cut Flower Industry in Ethiopia," World Development, Elsevier, vol. 39(10), pages 1760-1770.
- Yukichi Mano & Takashi Yamano & Aya Suzuki & Tomoya Matsumoto, 2011. "Local and Personal Networks in Employment and the Development of Labor Markets:Evidence from the Cut Flower Industry in Ethiopia," GRIPS Discussion Papers 10-29, National Graduate Institute for Policy Studies.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:etd:wpaper:012. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dagmawi Atnafu)
If references are entirely missing, you can add them using this form.