Title

Economic Growth and Income Convergence in Ethiopia: A Critique

Document Type

Article

Journal or Conference Title

International Journal of Business and Social Science

ISSN

2219-1933

Volume

2

Issue

2

First Page

25

Last Page

28

Publication Date

2-1-2011

Department

Barowsky School of Business

Abstract

In its review of Ethiopia’s economy, the International Monetary Fund (IMF) has indicated that Ethiopia has been attaining economic growth for the past seven years. In addition, the IMF highlights that the lifestyle of the Ethiopian people has been getting better for the last two decades. In his recent statement, the Prime Minister of Ethiopia has stated that Ethiopia has not only registered rapid economic growth but the income from economic growth has been redistributed equitably. Over the last twenty years, Ethiopia has gone through various structural changes. However, unless the Ethiopian population is experiencing extreme poverty that is undetected, or the economy is completely controlled and managed by the state inducing minimal differences in wages and salaries, or instituting poverty-reducing public programs, though inconclusive, the economic literature does not seem to support Ethiopia’s Gini coefficient of 0.29 which is far below the Gini coefficient of newly industrialized countries. Therefore, the policy implication of this study is that the study that gave the entire world an impression that Ethiopia’s Gini coefficient is 0.29 needs to be replicated by other sound methodologies in order to confirm or invalidate the study.

Rights

Copyright © International Journal of Business and Social Science. All rights reserved.

Publisher Statement

Originally published as Desta, A. (2011). Economic Growth and Income Convergence in Ethiopia: A Critique. International Journal of Business and Social Science, 2(2), 25-28.