For prosperity, Ethiopia needs institutional not individual strength

If reforms are to succeed, Ethiopian society should focus on building autonomous institutions, rather than expect political elites to stop grappling for control of them.

For the past two years, our country has been embroiled in conflicts that have claimed the lives of thousands and displaced many more.

Key institutions such as parliament and the judiciary, which were designed to check the excesses of state power, are as weak as they have ever been. Instead of building understanding and consensus, our political conversations have also become more and more corrosive.

We need to recognize that our problems are complicated and that they require cool-headed assessment, not social media shouting matches. In that spirit, we should draw lessons from the historical experiences of other countries when it comes to the daunting process of building inclusive institutions.

History books are littered with examples of leaders coming to power in the name of radical change and eventually reproducing the same extractive institutions that they sought to reform.

In fact, these cases are so abundant that the sociologist Robert Michels calls this empirical regularity the Iron Law of Oligarchy. Michels argues that the internal logic of any oligarchic structure, as a matter of fact any hierarchical organization, is such that it tends to be reproduced even when a different group of elites are in charge.

Thanks to recent advances in the political economy of development, especially due to the pioneering contributions of MIT economist Daron Acemoglu and University of Chicago political scientist James Robinson, we now know a great deal about why political and economic institutions matter, why they tend to persist, and how they change. In their magnum opus, Why Nations Fail, these scholars outline three important reasons why extractive institutions, like those in Ethiopia,  tend to persist.

The first is the synergistic relationship between extractive political institutions and extractive economic institutions.

Deeply rooted and highly extractive economic institutions which tilt the economic playing field in the favor of a few business elites help perpetuate highly extractive political institutions in which political power is also concentrated in the hands of a few elites. Similarly, the presence of an unconstrained and highly concentrated political power helps sustain a set of economic institutions that allow for politically connected business elites to amass economic wealth at the expense of others.

In the Ethiopian context, this synergistic relationship was particularly evident in the March election fundraiser that was organized by Ethiopia’s ruling political party. While the Prosperity Party was able to raise 1.5 billion birr from business elites—the most ever by an Ethiopian political party—what was more remarkable was the fact that the businesspeople in attendance were very familiar faces. They were people who made their fortune under the previous regime and were its outspoken supporters. Most of them gained their wealth not because of their entrepreneurial prowess, but thanks to the symbiotic relationship that they had with the government.

It is the kind of relationship in which the business elite gives the ruling elite the financial resources that it then uses to sustain its clientelist and patronage relationships. On the other hand, the government gives these businesspeople all kinds of lucrative government contracts, de facto monopoly rights over some business sectors, and protects them against lawsuits for unlawful business practices.

The way Ethiopian Peoples’ Revolutionary Democratic Front’s (EPRDF) went about privatizing state-owned enterprises played a huge role in tilting the economic playing field and concentrating wealth. The biggest beneficiary of this privatization process was MIDROC, a company owned by the Saudi-Ethiopian business mogul Sheikh Al-Amoudi, which acquired about 60 percent of the privatized enterprises.

MIDROC had very close ties with the previous ruling party and Al-Amoudi openly backed EPRDF during the 2005 general election. Unsurprisingly, MIDROC also showed its support for Prosperity Party by giving 100 million birr during the election fundraiser.

The symbiotic relationship between business and political elites was succinctly articulated in the Prime Minister’s speech that night, where he reassured attendees that the “party will be working diligently to make sure that those who gave money in this election can afford to give five times more in the next election.”

It was a clear indication that the new regime is not about to disrupt the kind of symbiotic relationship highlighted above.

The second reason for the persistence of extractive institutions is that extractive political institutions, by definition, have weak safeguards against the arbitrary exercise of power.

Therefore, whenever a regime with an extractive political institution is replaced, the new regime also faces very little constraints acting against the misuse of state powers. In essence, power unchecked is power abused. It is no mystery that under EPRDF rule, Ethiopia’s critical institutions, including the media, judiciary, and legislature, were deliberately weakened to the point where they were enabling, not constraining, the power of the executive.

It is in this institutional backdrop that the current ‘reformist’ group came to power.

Everywhere you look in the country, it is evident that these institutions are still very weak, and have been unable to serve as a check on the excesses of power.

This is particularly evident in the justice system. For the country to come to terms with its history of gross humans’ rights violations and corruption, what is needed is meaningful accountability, justice, and reconciliation.

Instead of a fair trial and due process, what the victims got was a political circus that involved a series of documentaries and politically motivated prosecutions that target those who are considered to be threats. In the meantime, in the name of reconciliation and forgiveness, some key actors from the previous regime, whose hands are by no means clean of all past wrongdoings, are being appointed to high government positions.

Another recent example of selective justice came shortly after the tragic killing of musician Hachalu Hundessa, where the jailing of key political figures—including those who have absolutely no history of violent resistance, such as Lidetu Ayalew and Yilkal Getnet—seems to be more about frustrating government opposition than delivering justice.

This undermines public confidence in the courts at a time when we need them the most.

A further example of weak institutions is the state-owned and party-affiliated media which, instead of giving coverage to the most important issues facing the country and exposing the misuse of state power, focuses more on prime ministerial photo-ops.

It was quite disheartening, for example, to see state media giving more coverage to office renovation projects than the plight of the victims of ensuing civil violence. These media outlets have repeatedly refrained from conducting the type of investigative journalism that would uncover whether the recent violence had an ethnic and religious dimension and what its root causes were.

The third and final reason for the persistence of extractive institutions pertains to the fact that they raise the stakes of the political game by concentrating unconstrained power and economic resources in a narrow group of ruling elites. This means that whoever controls the state apparatus gains a lot from excessive political power and the wealth that it generates.

Therefore, various groups of people would do anything to seize political power and enrich themselves at the expense of others. As witnessed throughout history, this results in the type of infighting and civil war that not only brings an immeasurable amount of human suffering, but also reverses any gains made towards the political centralization needed to run a cohesive federal state, which is itself a crucial prerequisite for any kind of transition towards inclusive institutions.

This particular channel through which extractive institutions persist should be apparent to anyone who is a keen observer of contemporary Ethiopian politics. Stoking anger, fear, and division seems to be the surest guide to building a political career in the country.

At the time of writing, there are parts of the country where the government has failed to uphold its basic responsibility of maintaining law and order. There is a region in the country which has completely refused to take any directives from the federal government and held its own regional election without the will and supervision of the National Electoral Board.

Furthermore, we are increasingly witnessing the type of unrest and communal violence that has internally displaced 1.6 million Ethiopians. And in a manner very unusual in Ethiopian politics, we are also seeing the assassination of high-profile government officials and celebrities.

By now, anybody who is reading this understands that the forces that perpetuate oppressive institutions are formidable and that changing these institutions is no easy feat.

However, that is not to say that it is impossible, as some societies have managed to successfully transform their highly oppressive and extractive institutions into pluralistic and inclusive ones. From the Glorious Revolution in 17th century England, the French Revolution in 18th century, to Brazil’s transformation in the late 20th century, broad-based opposition movements have been fundamental in catalyzing such institutional transformations.

On the other hand, the track record of changes that were spearheaded by a narrow elite or a specific narrow interest is that of an unfailing reproduction of the same extractive institutions. The identity of the actors which are doing the extracting might change, the extraction might take a different form, but the institutions remain as extractive and oppressive as ever.

A good argument can be made that the struggle that brought the current regime to power consisted of a diverse and broad coalition of actors who understood that their economic and social ills were deeply intertwined with the country’s extractive political institutions.

In the years and months leading to the change, Ethiopians of different ethnic groups and walks of life showed an unusual solidarity and an impressive resolve in opposing EPRDF’s rule. I was particularly impressed to see the solidarity displayed by young people from Oromia and Amhara, whose activism and protests called for a fundamental shift in how political power was organized; not for minor policy fixes here and there.

However, if the opposition that brought the new regime to power was truly a broad-based coalition, then why are our political and economic institutions still extractive?

When the group led by Abiy Ahmed came to power, a significant number of Ethiopians started to think that the job was done. The prevailing narrative being that change came because a handful of highly courageous politicians staged a successful resistance against EPRDF’s rule from within. And that they, so the story went, were therefore capable of single-handedly leading the transition towards prosperity and inclusive institutions.

This, I believe, is the type of historical revisionism that is not only utterly wrong, but also very dangerous.

Of course, that is not to say that there has not been any government opposition in the country in the past two years. However, given that such an opposition has been ethnically polarized and splintered, and in light of the fact that some within such opposition movements are only seeking to be in charge of the state machinery in order to exploit its extractive institutions to their advantage, the type of government opposition we see today is nowhere close to generating the broad-based coalition that is required to build pluralistic institutions.

As such, it is important for the Ethiopian people to realize that the job of reforming the country is not done—in fact, it has only just begun.

The stakes are too great, and the implications are too profound, for us to put our faith in a narrow group of people, let alone an individual, to carry out the formidable task of building pluralistic inclusive institutions.

Historically speaking, it has never worked that way and, for obvious reasons, it never will.

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This is the author’s viewpoint. However, Ethiopia Insight will correct clear factual errors.

Editors: Ayele Woubshet, William Davison

Main photo: Prime Minister Abiy Ahmed with Alibaba co-founder Jack Ma; 25 November 2019; PMO.

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About the author

Fikremariam Molla Gedefaw

Fikremariam received a BA Economics degree from the University of Toronto, and he is currently a pre-doctoral Research Fellow at the same institution.


  • It Is well articulated, balanced, and neutral. We expect More from you that, an article of a fortunate solution for Ethiopia.
    Well done Fikre.

  • “Merew
    September 16, 2020 at 12:20 am
    Amara will not colonize other ethnicities nomore. The aristocrat Amaras will not reverse the federalism no it seematter what. The Amara hegemony is long gone. All ethnicities are free to cultivate their cultures and are free to live together in harmony as equals with no ethnicity being above the other in the country .”

    First learn the basics of federalism and get a very basic, at least rudimentary understanding of what you were taught possibly as a cadre or what you think you know from your readings. Nah, there was no Amhara hegemony. You are confusing the Amharic language being used as an official language, a historical incident and antecedent of the 12 th century with Amhara hegemony. It is certain that there will never be TPLF, by extension no more Tigrayan hegemony in 21 st century Ethiopia, any longer. The past 30 years of wanna be “aristocrats” to use your own word, have brought Ethiopia bureaucratic mediocrity, nepotism, theft, robbery, moral and ethical collapse and loss of individual responsibility and accountability. Hopefully, Ethiopians have learned enough by now, not to repeat mistakes of the past 50 years, and in particular the pain and agonies of the past 30 years of Tigrayan “hegemony” vis a vis TPLF.

  • Comment: This Is a well articulated, balanced, and neutral Article I have missed such articles since decades. I Want To Read Hundreds Of This Sort. May God multiply such young independent minds of Africa so that the future would be bright for the young and the elderly in the continent.

  • Ethiopia put all her eggs in one basket . Ethiopians lived without electricity for several years but now rather than enjoying the great weather which does not require heater air conditioner electricity consumption as most other parts of the European world does , Ethiopia jumped in to compete with the global capitalism rat race prioritizing economic figures the world bank tells Ethiopia rather than the human Developmental assessment on the ground. Ethiopia wanted to manufacture clothes rather than develop farms to produce food. The Ethiopian government wanted to make Ethiopia the resort island for under age prostitution tourist destination.

    GERD was being built to develop textile industry and to build motels hotels across Ethiopia to boost tourism. Also to export electricity to nearby oil rich nations. Thus living the environment around Benishangul Gumuz almost unhabitable . Now the people who lived depending on farming in Ethiopia are forced to prostitute themselvess rather than live a simple life , especially those around GERD are left with no access to the Abay water and to their ancestoral farming lands living them no choice but to join the rat race the me me ethnic feud , the me me ethnic feud is destroying the fabric which is holding Ethiopia together THE AMARA.

  • I feel good on your articulations.
    As you have said, there is no check and balance of power in Ethiopia. The Executive hold all power and redistribute to the parliament and judicial, just for artificial practice. The current ruling party ( Prosperity Party) has no intentions to build democracy/ right to self rule, election, politically Organised, self expression, right to oppose/. Practically, building autocratic and single rule government.
    Finally, I expect from you that, an article of a fortunate solution for Ethiopia.

  • This biggest problem of Ethiopia is not political elites or tribal divisions it is the damin system of judiciary institutions. There is no rule of law in Ethiopia . If the countries ( Ethiopia) law and order is not functioning equally for all and the Ethiopian entire society not equally seen in front of the judiciary system that benefit all the time a few group Ethiopia can not see a bright future and the so called democracy. In my opinion Ethiopian problem is only one the is every and each institution must obey or respect the rule or law from the federal to the Kebele local levels. Ethiopians never respect their own rule of law both civilian and governing bodies. The key problems of Ethiopia is not building democratic institutions and rule of law for all Ethiopian communities except for a few political groups in the country. In my opinion the Ethiopian people’s grave danger is a few tribal greedy ideology and absence of political consensus among each other to control their superiority and strong position in the country to dominate their political agenda is a great cancer for Ethiopian unity .

  • Amara will not colonize other ethnicities nomore. The aristocrat Amaras will not reverse the federalism no it seematter what. The Amara hegemony is long gone. All ethnicities are free to cultivate their cultures and are free to live together in harmony as equals with no ethnicity being above the other in the country .

    • I dont believe that amara was the only culprit. Think about it, Mengistu, then Meles. Then Abbiy were not pro Amara but the disease to oppress and dominate still prevails. I am saying the intention to dominate in every consecutive regime is the disease

      • Exactly.

        Virtually all ethnic activists seem to be stuck on a narrative that has been long dead. The fact that Haile Selassie, Mengistu, Meles, Abiy were not fully Amhara is a proof that centralized power does not need any language. Even when King Yohannes was strong at the center, he still used Amharic.

        The actual issue is marginalized groups against central powers. Not ethnic groups vs Amhara.

  • Excellent piece, it atriculated why we are in the current situatiom we are in and dispalyed it as not a conflict of ethnics but rather conflict of elites hell bent on capturing the extractive economic and political institutions and fomenting ethnic clashes, hatred and irredentisim as a tool for said capture. It reminds of of Meles’s (God rest his soul) “Africa’s Dead-ends and new beginnings” where he argued rent seeking neo-liberal elites would extract value from the economy without enabling it to create said value (funny how it still happened with the governmental istitutions becoming the said rent seeking elites that extracted value without creating it).
    But I would ask if there is, at least, guidelines or ,at most, blueprints of doing the solutions that you stated in your piece? It’s obvious that we can’t wait for our elites to come up with it b/c they are busy keeping us at eachother’s throats for their own benefit.

  • We need :
    – Federal courts in every region
    – Take the best and brightest as district administrators, out of their home region
    – Civil service training to be made ethical, balanced and professional
    – Federal police outposts in every district

    if we cant get this, we need a strongman rule.

  • We have to mature beyond tribal based loyalty at the expense of the wellbeing of everyone else. Every leader had favored or disfavored others depending on schism. This is a very old and outworn approach. The American constitution and democratic value was established on the basis of balancing power and understanding power. Government, people, and wealthy peoples power. Our sense of power is concentrated and is vertical. It needs to be distributed….

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