Why Ethiopia Fails: Analyzing the Shift from Meles Zenawi’s Legacy to Abiy Ahmed’s Rule

Why Ethiopia Fails: Analyzing the Shift from Meles Zenawi’s Legacy to Abiy Ahmed’s Rule

Recently, I read the article “The Ethiopian Economy, Nation-Building, and the Tigray War: An Interview with Semhal M. Zenawi by Mehdi Labzaé.” The intellectual rigor within its pages reminded me of the legacy of her father, Meles Zenawi, Ethiopia’s prime minister for 21 years, who was known for his towering intellect and vision of a developmental state aimed at lifting millions out of poverty. While his leadership had its shortcomings, his commitment to Ethiopia’s progress and sovereignty was undeniable. Meles represented Africa on the global stage with distinction, earning the respect of world leaders.

In stark contrast, the current prime minister, Abiy Ahmed, has significantly diminished the stature of the premiership. It is evident from the prime minister’s various public statements that the office has effectively been reduced to little more than a department within the Addis Ababa municipality. Abiy Ahmed’s tenure has been characterized by a pattern of conceding Ethiopia’s strategic interests to foreign powers, particularly those in the Middle East, leading to a decline in his international standing and diminished respect from global counterparts. His most notable skills—deception and ruthless ambition—have weakened Ethiopia’s multinational existence and international standing and compromised its sovereignty.

Semhal provides an insightful analysis of how shifts in Ethiopia’s political economy and liberalization policies have contributed to internal polarization and the outbreak of the war on Tigray. Her perspectives reminded me of the themes explored in Daron Acemoglu and James A. Robinson’s seminal work, Why Nations Fail, and inspired me to share my thoughts on how the institutional dynamics discussed by Acemoglu and Robinson parallel the current situation in Ethiopia.

Ethiopia is undergoing a profound transformation, shifting from Meles Zenawi’s imperfect yet more inclusive developmental state model to a more extractive and fragmented system under Abiy Ahmed. This shift, as highlighted by Semhal Zenawi and framed within Acemoglu and Robinson’s Why Nations Fail, has intensified political and economic crises, exacerbated internal divisions, and undermined the country’s resilience. As long as Abiy’s extractive policies persist, Ethiopia faces escalating instability, threatening both its future and regional stability. The country’s path forward must prioritize inclusive institutions and genuine commitment to equitable development to avert further decline.

Institutional Shifts and Economic Liberalization

Semhal’s analysis highlights a critical transition in Ethiopia from a developmental state model, characterized by accelerated growth benefiting the population at large and enabling an autonomous state free from private sector influence, to a market-driven model that emphasizes private sector investment, diminishing the State’s role in economic planning. Semhal argues that the shift from agriculture to industry policy, introduced midway through the Growth and Transformation Plan I (GTP1), effectively abandoned the multinational state-building project. The GTP was an ambitious national strategy aimed at transforming Ethiopia into a middle-income country by 2025. It outlined a series of five-year development plans designed to accelerate economic growth, reduce poverty, and modernize the country’s infrastructure and key sectors. Although industrialization was part of the key objectives of the GTP, agriculture was to be prioritized as a central driver of the economy. The GTP was to be implemented through a strong, interventionist state that would guide economic development through strategic planning and state-led investments while maintaining tight control over key sectors. The state would play an active role in directing resources toward priority areas, regulating the economy, and fostering domestic industries. 

However, the shift to abandoning agricultural policies, particularly during Prime Minister Hailemariam Desalegn’s tenure (2012-2018), emphasized market-driven development and reduced the state’s role in economic planning. According to Semhal, this shift especially impacted “rurban” areas, which she defines as rural areas by definition but having urban characteristics. She posits that the shift created distributive pressures in these “rurban” areas where young people’s aspirations for adulthood were hindered by a lack of access to income and property, leading to uprisings like the Querro movement.

Furthermore, Semhal critiques Bereket Simon’s push for political plurality as a corrective measure to the developmental state by introducing proportional representation from opposition groups. While it is debatable that the groups Bereket invited lacked genuine societal legitimacy, Semhal’s critique highlights a deeper issue: the attempt to introduce political plurality in isolation from the necessary structural transformation of the economy. This separation reveals a fundamental misunderstanding of the core problem leading to Ethiopia’s unraveling—namely, the underdeveloped state and market institutions. 

Why Nations Fail posits that inclusive institutions that allow and encourage broad participation in economic activities and political processes are essential for sustained growth and stability. In contrast, extractive institutions, which concentrate power and wealth in the hands of a few, often lead to stagnation and unrest. Ethiopia’s move toward liberalization can thus be interpreted as a shift from a developmental state that at least aspired to be more inclusive to increasingly extractive institutions, exacerbating inequalities and fueling discontent among various groups. Although the model sought to create robust and inclusive institutions, it struggled to realize these goals fully. Inequality remained a persistent issue, challenging the narrative that the developmental state was truly inclusive. 

However, for a developmental state to have a chance at being inclusive, it must be led by individuals committed to the broader population and resistant to corruption, which it has in Meles Zenawi. He exemplified this commitment. Despite a lack of political plurality, which he deemed unnecessary for a developmental state, his governance under a dominant party model managed to curb extreme extraction and achieve substantial growth. After his death, this commitment waned, leading to the abandonment of policies that benefited the majority and fueling movements like the Querro uprising. The absence of political representation and public goods further contributed to Ethiopia’s economic failure, reflecting the challenges outlined in Why Nations Fail.

Even more change came with the Abiy Ahmed administration. In stark contrast to Meles’, Abiy Ahmed’s economic framework has embraced Western-led economic liberalization, marked by partnerships with international institutions like the International Monetary Fund (IMF) and World Bank, currency devaluation, and the sale of state-owned enterprises. These policies have been introduced amid severe economic challenges, including high inflation, foreign currency shortages, and a crippling debt burden. The rapid overhaul of Ethiopia’s economic policy has been accompanied by widespread economic devastation, raising concerns about escalating inequality to unprecedented levels, the loss of state control over vital sectors, and the overall sustainability of the current economic trajectory.

Centralization and Multinationalism


Semhal also discusses the tension between centralization and Ethiopia’s multinational federal structure. She argues that the centralizing tendencies observed during Hailemariam’s tenure, particularly the concentration of power in the prime minister’s office and the influence of his old Ethiopian People’s Revolutionary Democratic Front (EPRDF) advisors, often conflicted with Ethiopia’s ethnic federalism, which was intended to respect the country’s diverse nationalities. This centralization was partly driven by market-oriented policies that, rather than promoting inclusive growth, failed to deliver benefits for the broader population. As a result, policy changes under Hailemariam did not align with the needs of Ethiopia’s various nationalities, exacerbating tensions and undermining the federal system designed to ensure balanced representation and equitable development. The shift from economic populism to what she calls “right-wing populism” within the Oromo Peoples’ Democratic Organization (OPDO) occurred as these market-oriented policies failed to deliver the expected development, and the economy began to falter.

Why Nations Fail underscores that political centralization without inclusive representation can lead to exclusionary practices, fostering resentment and conflict among marginalized groups. Semhal’s perspective further emphasizes the importance of institutional clarity and organizational cohesiveness within the ruling party, the EPRDF, during Hailemariam’s era. She contends that the lack of open discussion and proper approval processes when introducing policy changes contributed to factionalism and internal power struggles, which she calls “backdoor horse-trading.”

However, this level of centralization, characterized by a dominant coalition intended to represent Ethiopia’s multiple nationalities, diverges sharply from the type of centralization critiqued in Why Nations Fail. In the book, centralization becomes problematic when it leads to extractive institutions—where power is concentrated in the hands of a few who exploit the majority, stifling innovation, limiting economic opportunities, and enforcing policies that serve narrow elite interests. Such centralization undermines inclusive institutions that foster participation, accountability and shared prosperity.

The EPRDF’s model, which sought to balance Ethiopia’s diverse ethnic groups within a single-party framework, theoretically aimed to unify different nationalities under a shared developmental agenda. However, when policy changes bypassed established processes, as Semhal suggests, this approach inadvertently sowed division rather than cohesion. Instead of creating a centralized structure that enhances collective decision-making and represents diverse interests equitably, the result was factionalism and elite bargaining, resembling the extractive institutions described in Why Nations Fail.

As noted, Meles Zenawi’s successors lacked his commitment to the developmental state model. In the aftermath of his passing, a shift toward market-driven policies seemed inevitable. However, if existing institutions were too fragile to withstand policy missteps, it raises questions about their inclusivity from the outset. This scenario points to a deeper flaw in the one-party dominant system, which failed to provide mechanisms for managing diverse ideas from multiple parties representing various national interests. A more inclusive approach, with pluralistic policy debates and adoptions, could have ensured broader representation and a more resilient governance structure.

The Abandonment of Tigray’s Social Base: A Critique of Leadership and Ideological Betrayal


Semhal’s most severe criticism is directed at the leadership of the TPLF. She argues that an elite consensus in Tigray views “politics as rent-sharing agreements among gambling elites,” leading to the abandonment of Tigray’s social base and the covert introduction of Abiy’s policies. She sees Tigray as a victim of a “rent-seeking political economy,” expanding the power of its parasitic elites. She highlights the entrenchment of Tigray’s military in an extractive economy and expresses profound disappointment in the neglect of the rural economy after the war, calling it a significant betrayal of Tigray’s rural social base.

These failures are attributed to abandoning developmental state principles that prioritized value-adding activities benefiting the rural majority. The erosion of these principles after Meles Zenawi’s death reveals that the government institutions themselves lacked the mechanisms to prevent rent-seeking and enforce accountability among leaders who failed to prioritize the majority’s interests.

The concentration of economic power in the hands of a few elites, combined with the lack of accountability and representation, mirrors the extractive political institutions discussed in Why Nations Fail. Such institutions create barriers to equitable development, stifling growth by enabling parasitic elites to thrive at the expense of broader progress. The abandonment of Zenawi’s developmental state principles suggests that without robust institutional frameworks to check corruption and enforce accountability, even well-intentioned governance can degrade into rent-seeking and factionalism, leading to national failure.

Conclusion

The current state of Ethiopia, as analyzed through Semhal Zenawi’s critique and the framework of Why Nations Fail, demonstrates a profound shift from an imperfect yet aspiring to be economically inclusive developmental state model championed by Meles Zenawi to a more extractive and fragmented system. The abandonment of inclusive policies, the rise of parasitic elites, and the entrenchment of rent-seeking behaviors have deepened Ethiopia’s political and economic crises. This shift has not only weakened the social base in regions like Tigray but has also exacerbated internal divisions, stifled growth, and eroded Ethiopia’s resilience, reducing its institutions to instruments serving Abiy Ahmed’s unpredictable ambitions.

Ultimately, Ethiopia’s experience underscores the critical importance of maintaining inclusive political and economic institutions that promote broad-based participation, accountability, and equitable development. Without these, any state—regardless of its initial intentions—risks descending into the cycle of failure described by Acemoglu and Robinson. To navigate its current challenges and secure a more prosperous future, Ethiopia must reorient its policies toward inclusivity, rebuild trust in its institutions, and foster a genuine commitment to the well-being of all its people.

However, as long as Abiy Ahmed remains in power, the extractivism highlighted by Semhal—facilitated by Middle Eastern capital throughout the Sahel—will persist, compounded by internal turmoil with civil wars erupting in multiple regions and instability driven by alliances such as those among Egypt, Eritrea, and Somalia. The international community must recognize that such leadership poses a serious threat to regional stability.

Donek Zemo – Omna Tigray External Contributor, October 2024

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