Ethiopia Needs Long-Term National Development Plan (Part Twenty-Three, Policy-Making Experience)

Tsegaye Tegenu, PhD
2024-07-31

The vision of “Creating a Post-Scarcity Economy, Thriving Middle Class, and Self-Reliant Society” encompasses 342 operational strategies and 354 policies. Some readers may perceive this detailed discussion as abstract or repetitive, merely copied from research materials. However, my intention is to demonstrate the extent, depth, and complexity of the problems faced by the Ethiopian people. This is about addressing the challenges faced by 125 million individuals.

Specialized experts can refine these strategies and policies, applying their knowledge and experience to ensure they are practical, effective, and aligned with best practices. While having a detailed action plan (strategy) and clear guidelines (policy) is essential, successful management and implementation of long-term national development plan also critically depend on policy making experiences.

Policy-making is a dynamic and iterative process by which governmental and public authorities identify public issues requiring action, set objectives, and formulate strategies to address these issues. It involves the identification, formulation, and selection of policy options, taking into account political ambitions, economic pragmatism, social inclusiveness, and the practical mechanisms needed for effective implementation. This process is influenced by the priorities, constraints, and values of the prevailing political, economic, and social contexts, reflecting the goals of both leaders and the public.

Historical context of policy making experiences

Ethiopia had Five-Year Development Plan since the late 1950s. By then the total population of the country was 22 million. In the 1970s the country had no national planning (it was revolutionary time). In the 1980s there was Ten Year Perspective Plan covering the period 1984/85-1993/94. By then (late 1980s) the population has doubled to 44 million.

During EPRDF, the country had five-years National Development Plan, Poverty Reduction Programs, Growth and Transformation Plan (GTPI). By 2014 (end of GTPI), the population has doubled to 88 million. The country had Growth and Transformation Plan II (GTP II) and Ten Years Perspective Development Plan for the period 2015 to the present. During this period the population has increased by 32 million people.

Reflecting on 50 years of policy-making experience can offer a wealth of lessons. First it helps to understand policy impact over time. Policies often have delayed outcomes. Long-term reflection helps in understanding how initial decisions play out over decades, offering insights into their sustainability and effectiveness. Experience can highlight unintended consequences that might not have been apparent initially, helping policymakers to anticipate and mitigate similar issues in the future.

Second, reflecting on 50 years of policy-making experience reveals the effectiveness of different approaches used by policymakers to address public issues. The effectiveness of these different approaches—whether regulatory/state based, market-based, social welfare-oriented, or otherwise reveals the ability to adapt and revise policies in response to changing circumstances. Lessons learned from past approaches can guide more flexible and adaptive policy-making.

Third, reflecting on 50 years of policy-making experience offers a comprehensive understanding of the complexities and challenges of governance and institutional development. It is possible that over time, the country’s governance structures and institutions have likely evolved, leading to more sophisticated and effective policy-making processes. Long-term experience often reveals the importance of maintaining transparency and accountability in governance, which helps in fostering public trust and ensuring effective policy outcomes.

In summary, the long-term experience of policy-making in Ethiopia provides a rich foundation for understanding the long-term impacts of policies, evaluating the effectiveness of various approaches, and evolving the governance system to better serve its needs. These experiences help current and future policymakers to avoid past mistakes, build on successes, and innovate in response to new challenges. The question is what are the lessons we have learnt from 50 years of policy-making experience?

Impact of Policies: Short-term Incremental Changes

What are the sustained and lasting effects of the county’s development policies over time? Evaluating the sustained and lasting effects of a country’s development policies over time requires a multi-faceted approach, taking into account various measurement criteria. These criteria can be grouped into several key areas, each reflecting different aspects of development. Some of the traditional measurements include the following: economic indicators (GDP growth, unemployment rate, inflation rate, balance of trade), social indicators (poverty rate, life expectancy, literacy rate), infrastructure indicators (access to basic services), environmental indicators (forest cover and deforestation rates), and governance indicators (corruption perceptions index and rule of law).

I use also non-traditional measurement indicators which emphasize the dynamic and multifaceted nature of development. They include transforming and building the economic structure, entrepreneurship building and business growth, spatial transformation and integration (see Part Sixteen, Goals). In practice, a comprehensive evaluation often benefits from using both traditional and non-traditional indicators.

For our interest of assessing the overall economic and social conditions of long-term impacts of policies, let us assume that the traditional indicators have shown incremental changes. That means we have a gradual, often small-scale adjustments and improvements rather than radical transformations that I expect taking into account of rapid population growth in the country. In other words, the county’s development policies over time have shown incremental changes while population growth was exponential.

There is a mismatch between incremental policy changes and exponential population growth. Incremental changes could not adequately expand the capacity of essential services and infrastructure, leading to shortages and decreased quality of life. As we have discussed resources have become scarce, poverty inequality has increased, with marginalized and vulnerable populations disproportionately affected. A rapidly growing population required job creation and economic growth at a pace that incremental changes could not support, leading to higher unemployment and economic instability.

The disparity between incremental policy changes and exponential population growth underscores the need for a more dynamic and forward-thinking approach to policy-making. Long-term plans must consider not only current needs but also anticipate future challenges, particularly in the context of rapid population growth.

Shifts in Policy Focus and Effectiveness of Government Approaches

Governments should adapt to changing circumstances and experiment with various strategies to achieve their development goals. Economic conditions (such as crisis and globalization), social needs (such as changes in the age structure of the population), political dynamics (such as changes in political leadership or ideology) leads to shifts in policy focus.

The question is what were the different strategies used by the governments to influence economic and social outcomes of these policy shifts. Broadly speaking, there are two approaches categorized based on the extent and nature of government intervention in the economy: market and non-market approaches.

Market approaches emphasize minimal government intervention, relying on free markets and private sector mechanisms to allocate resources efficiently. The belief underpinning market approaches is that markets, driven by supply and demand, are the best way to achieve efficient allocation of resources, innovation, and economic growth.

Non-market approaches involve more direct government intervention in the economy and society. These approaches are often used to correct market failures, achieve social goals, or ensure equity and fairness. The focus is on regulation, provision of public goods, and redistributive policies.

Most countries employ a mix of market and non-market approaches, creating a balance that fits their economic goals, social values, and institutional capacities. This balance is often dynamic, shifting in response to changing economic conditions, political ideologies, and societal needs.

As mentioned above in the historical context, there is a shift in policy focus over decades. The governments have tried to adopt to changing economic, social and political contexts. However, the approaches used by governments to influence economic and social outcomes have remained the same. It was mainly non-market approach which involved more direct government intervention in the economy and society.

Using non-market approaches over decades, despite changes in policy shifts, have presented several challenges and potential problems. Government-managed programs have become inefficient, with high administrative costs and slow responsiveness due to bureaucratic inertia and lack of competition-driven innovation. The long-term financial burden of extensive public services, subsidies, and welfare programs have strained government budgets, leading to unsustainable debt levels and limiting fiscal flexibility. Prolonged government intervention led to regulatory capture, where special interest groups influenced policy for their benefit, and increased corruption and mismanagement. Entrenched interests have created resistance to necessary reforms, making it difficult to adjust policies in response to new challenges and advices.

Methods for implementing and managing long-term development plans

There are two distinct methodologies for implementing and managing long-term national development plans: top-down and bottom-up approaches. The top-down approach involves decision-making and directive issuance from higher levels of government or leadership, which are then implemented by lower levels of the administration or public institutions. The bottom-up approach emphasizes involving lower levels of government, communities, and stakeholders in the planning and implementation of development plans. It focuses on grassroots input and local needs.

The choice between a top-down and bottom-up approach depends on the specific context of the national development plan, including the nature of the development goals, the existing administrative structure, and the level of local capacity and engagement. In many cases, a hybrid approach that combines elements of both methodologies can offer a balanced strategy, leveraging the strengths of centralized coordination and local adaptability.

What we observe in Ethiopian policy making experience is the top-down approach. Policy decisions and strategic plans are formulated at the national or central level by senior leaders, ministries, or government agencies. Plans and directives are cascaded down through various administrative levels, with lower-level agencies and local governments tasked with implementation. The central authority controls the planning process, setting goals, priorities, and resource allocations without necessarily consulting or involving lower-level stakeholders.

Even if this top-down approach has potential advantageous with regard to providing a unified strategic direction and can ensure consistency in policy and program implementation, it has caused potential disadvantageous related to lack of community local initiatives. The centralized processes have bogged down the bureaucracy, often slowing down implementation.

The centralization and directive nature of top-down methods have amplified the issues faced with non-market approach discussed above. The centralization of decision-making and implementation has led to inefficiencies, misalignment with local needs, increased bureaucratic complexity, and potential issues with corruption and innovation.

Insanity: Using the same old incremental change, non-market and top-down approaches expecting transformation, industrialization and abundance

As we mentioned in the historical context, there were policy shifts in the form of sectoral reforms, poverty reduction, growth and transformation, etc. But the government used the same methods to address these emerging complex and evolving problems. These old methods include incremental change, non-market and top-down approaches.

“Insanity: doing the same thing over and over again and expecting different results”. This graphic reference is attributed to Albert Einstein, he was probably referring to the scientific method, where you have tight control over the experimentation.

In a closed and tightly government controlled long-term plan, it would be a poor use of one’s time to continue use the same approaches over and over again expecting a different development outcome. Short-term incremental changes, non-market and top-down approaches could not address the root causes of recurrent problems effectively. Because they are slow, bureaucratic, and resource-intensive, they could not leverage transformation and productivity. Because the approaches are outdated, they were not flexible enough to adapt to new challenges or changing conditions caused by rapid population growth. Sticking to them have resulted in missed opportunities for improvement.

It is now time to change to long-term and exponential thinking in policy making to find scalable, diversified and productive solutions and systems that can expand to meet the needs of a growing population of the country.