Ethiopian Macroeconomic Modeling in Historical Perspective: Bringing Gebre-Hiwot and His Contemporaries to the Ethiopian Macroeconomics Realm

Introduction¹

Recent macroeconomic analysis in Ethiopia is hardly ever linked to the country's pioneer development thinkers. The latter, however, articulated the Ethiopian development problems and the appropriate policy direction to address them nearly a century ago. The development thinkers of early twentieth-century Ethiopia have captured the imagination of prominent Ethiopian historians and their students (see Bahru 2002, for instance). Ethiopian (Africanist) economists, however, seem to lag behind in appreciating the theoretical insights of these pioneer development thinkers. This article is aimed at bridging the gap. The article has the objective of reviewing the economic ideas of these reformer-intellectuals and then building a linear model based on a synthesis of their development thinking. Extending an earlier study on Gebre-Hiwot (see Alemayehu 2002), in this article a linear macro model is formulated and solved to analytically render solutions that give theoretical insights on historic as well as contemporary macroeconomic issues in Ethiopia. The paper is written with two distinct types of readers in mind: students of development studies (including general readers on African development thinking) and economists. The former category of readers may skip section 3, without losing much of the essence of the article.

The rest of the article is organized as follows. I provide brief biographical details and the basic development ideas of three important development economists of early twentieth-century Ethiopia: Gebre Hiwot Baykedagne, Mikael Tessema, and Déréssa Amante. Then in section 3 an attempt to synthesize the basic ideas of the three writers within the context of a general Gebre-Hiwot linear macro model is made. This linear model is used to render analytical solutions to shed light on the theoretical implications of this development thinking. In the conclusion, I draw policy implications for future progress.

Review of Early Twentieth-Century Development Thinking in Ethiopia

Chaulk (1978) noted that during the four decades from the battle of Adwa (between Italy and Ethiopia) until the Italian occupation of 1936–41, most Ethiopian intellectuals seemed to be optimistic about the future development of their country. The period up to and including the occupation, following Bahru's (1994) periodization of Ethiopian intellectual history, is referred to as the first period (the other two being 1941–74 and 1974 to the present). The period is unique because of (a) the general euphoria about development following the Italian defeat at Adwa, although intellectuals such as Gebre-Hiwot emphasized that without development and self-sufficiency the Adwa victory, and hence Ethiopia's independence, would be meaningless; (b) the increased number of Ethiopians that went to study in Europe and the development of modern schooling at home; (c) the fascination of many intellectuals with the Japanese development experience;² and (d) the articulation of and debate over development ideas through the medium of the weekly newspaper Berhanena Selam.

Although the scope of the debate in Berhanena Selam was wide ranging and involved many intellectuals of the period, this article is primarily concerned with the works of some of the influential writers on economic development issues. The economists of the time under analysis focused on the following issues, which they thought were central for Ethiopia's development: (a) the role of education and an educated work-force; (b) war/conflict and development; (c) the role of the state in development; (d) the role of institutions (organizations); (e) the importance of infrastructure; and (f) the nature of Ethiopia's economic interaction with industrialized countries. Notwithstanding the proliferation of a number of articles in the then vibrant medium of the time, Berhanena Selam, the economic writings of the three authors noted above stand out, due to the extent of their engagement in economic development discourse, and, most importantly, to the substance and depth of their economic argument.

The Macro Context and Development: Negaderas Gebre-Hiwot Baykedagne (1886–1919)

Gebre-Hiwot was born on 30 July 1886 in the village of May Masha in the district of Adwa, in the Tigray region of Northern Ethiopia.³ This period, according to Bahru (2002), was exceptionally turbulent in Tigray...