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Full-Text Articles in Social and Behavioral Sciences
Does Privatization Improve Productivity? Empirical Evidence From Ethiopia, Tadesse Wodajo, Dawit Senbet
Does Privatization Improve Productivity? Empirical Evidence From Ethiopia, Tadesse Wodajo, Dawit Senbet
International Journal of African Development
Theoretically, it is posited that privatization enables the private sector to play a dominant role in the economy by enhancing competition, productivity and efficiency. When evaluated using these criteria, privatization of the manufacturing industries has failed in Ethiopia. Our empirical results show that, at best, privatization did not result in improving productivity, and at worst, it led to a decline in productivity. We argue that the main reason for this outcome is the unique economic and business environment prevailing in Ethiopia, which does not allow the standard economic assumptions of market competition to hold. Ethiopia’s ‘private sector’ can be described …
Asymmetric Benefits: The Ethio-Eritrea Common Market (1991 To 1998), Worku Aberra
Asymmetric Benefits: The Ethio-Eritrea Common Market (1991 To 1998), Worku Aberra
International Journal of African Development
Economic theory suggests that a common market between two or more countries improves overall well-being, but it creates winners and losers in each country. Recent empirical findings also show that the overall impact of a common market on per capita income depends on the similarity of economic development between member countries. A common market among developed countries results in the convergence of per capita income while a common market among developing countries results in the divergence of per capita income. The difference in outcome, some economists suggest, is due to variations in comparative advantage between member states and the rest …