No abstract

A state-led industrialization push inspired by the East Asian ‘developmental state’ model is at the centre of Ethiopia’s recent economic success. This model has historically proved potent for achieving rapid industrialization, but the business-state alliance at the heart of the model generally aimed to curb the power of labour. Focusing on textile and leather manufacturing in Ethiopia, this article addresses two questions: are workers capable of extracting gains from the process of industrialization, and have the actions of workers affected global value chain integration in the two industries? Our data show that opportunities for collective voice among workers are limited. However, workers have expressed their discontent by leaving employers when working conditions fail to meet their expectations. The resulting turnover has generated significant obstacles for local and foreign firms attempting to participate in global value chains. In response, the Ethiopian state and employers implemented a number of measures, including restrictions on emigration and more generous non-wage benefits. Recent research on global value chains and labour highlights how workers are able to influence work practices through individual action. The present article builds on these ideas, but shows that firms and governments have the ability to respond and limit this power.

In this paper, I present a framework for GVC‐oriented industrial policy that merges the so‐called GVC perspective and the so‐called developmentalist perspective—the latter of which is a perspective that industrial policy is most often analysed through, but has been somewhat neglected by the GVC perspective. I argue that the GVC perspective too quickly dismisses the relevance of industrial policy in the East Asian development experience, particularly those in South Korea and Taiwan between roughly 1960 and 1990. By drawing on the industrialisation experiences of these two countries, my framework for industrial policy suggests that the GVC perspective's ideas for industrial policy would be strengthened by more clearly acknowledging the continued importance of three observations by the developmentalist perspective: (a) the need for governments in developing countries to bargain with foreign investors for the purpose of domestic industrialisation; (b) policy design should not only focus on increasing exports, but also focus on replacing some imports with domestic production; and (c) linking up to the value chains of transnational corporations based in high‐income countries can bring about some benefits, but ultimately, successful industrialisation necessitates a degree of competing with transnational corporations. State‐owned enterprises have historically played an important role in this respect.

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.

Ethiopia's economy has been growing at breakneck speed for well over a decade now, earning the nickname as Africa's lion. In recent years, the development literature on Ethiopia has paid particular attention to the role of industrial policy, especially the ways in which the Ethiopian experience compares to that of the Asian tigers. But through this comparative-historical perspective, little attention has been devoted to an important aspect of industrial policy in Ethiopia -foreign direct investment (FDI) in the manufacturing sector. This paper compares FDIoriented industrial policy in Ethiopia in the current era (particularly focusing on light manufacturing) to that of South Korea and Taiwan between 1960 and 1990, arguably the two most generalisable cases among the Asian tigers. The paper argues that FDI-oriented industrial policy in Ethiopia seems to be bringing about short-term economic benefits, and is showing promise for further industrialisation. At the same time, it could benefit from taking more lessons from the long-term economic development perspective that characterised South Korea's and Taiwan's approach to FDI. Such a long-term perspective most importantly includes pro-active strategies to transfer technology from foreign firms to the domestic economy and the creation of backward linkages from foreign to domestic firms.