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2007 AEC - Rethinking Industrial Policy For Lowincome Countries


I came to Addis in the summer of 2004 with Joe Stiglitz, to participate in what is called a Policy Dialogue. We talked to several groups, including representatives of aid agencies working in Ethiopia. At the meeting with about aid representatives – about 20 of them -- we asked each of them in turn to say something about the priorities of their aid work in Ethiopia. It was striking that they each identified more or less the same priorities, and their priorities were virtually all in the “social sectors” like primary health and primary education, and in “governance”. They made virtually no reference to the development of productive capacities. The closest any of them got to the development of “productive capacities” was one who mentioned that “rural roads” was one of his agency’s priorities. No-one mentioned anything to do with in agriculture, or irrigation, or manufacturing, or services. When they talked of “improving governance” they were not referring to improving the governance of the processes through which capital accumulation, technological progress, and diversification of production can be accelerated.

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