The state is at the very center of the Rent Seeking regime in Ethiopia-Part-I

By Habtamu Alebachew
As compared to other African states and the West, the Ethiopian state is exceptionally the central repository of both the rent-seeking regime and the anti-rent seeking front at the same time.

Firstly, the state did not have advantages to start a move toward development from a stage where rent seeking is a secondary problem.

It started from ground-zero level in which poverty and rent seeking behavior had unchallenged monopoly both in their political economy and in sociology.

Agricultural cooperatives provided the largest bastion of rural rent collection by policy-backed loot of the labor, land and other resources of the largest number of non-member farmers.

In urban centers, deadlocked development pressured urbanite citizens to gorgeously search for all possible rent seeking loopholes to collect undue benefits.

While predatory war economy was the agenda at the government table before 1991 again, the metaphoric kleptocracy (rule by thieves) expressed sociologically as ‘you have to plunder when others loot the house of your father’ was the reigning regime among the entire society.

Secondly, the state redefined its roles in Ethiopia after 1991 as one locomotive of rapid development, which brought twin counter pressures against its position in relation to the established rent seeking regime.

On the hand, the state has had to extricate itself from the shackles of rent seeking/collection traps, without which it could never assert and solidify its position of development leadership.

On the other hand, the state had to accept the grim reality of coexisting with the larger rent-seeking environment but prioritizing its sword against corruption as a public crime.

The biggest challenge for such a state here is that it would definitely consume many efforts to convince the populace that its true intention was the construction of a rent-free society against the entrenched social value that the ultimate end of political power has always been self-enrichment through rent collection, and even, through corruption.

In comparison with the states in the West, the Ethiopian state lacks structurally inbuilt mechanisms of controlling rent seeking behavior including the majority of civil society less dependent on government involvement and the existence of limited state, a well developed and better functioning free market that maintains a minimum of market failure, vast use of information and communication technology and others.

As the result, while the Ethiopian state is the most organized social force surrogating development, the state in the West is a moderately small-sized institution with a heavily selective involvement.

This structural difference, said differently by Bereket Simon as the “responsibility of the political leadership” could assume the following simple equations.

The state in the developed West and location of rent seeking:

Private sector-led (corporate) economy + market driven distribution+ selected state-involved distribution.

The Ethiopian state and location of rent seeking:
State-sponsored economic development + state-driven distribution + state dominated redistribution+ incipient private sector

Based on this structural dichotomy, rent seeking in the West is highly horizontal arising mainly between companies in the free market and dragging the legislature into the game.

In contrast, rent seeking in Ethiopia is vertical arising from relations between government and the people at large.

As compared to other African states, the Ethiopian state still faces the dangers of rent seeking for three structural reasons.

First, other African states, particularly black African countries with a large settler population, received distorted social structures by colonization from former colonizers in which an average of 11% of urban based white settlers, Indians and domestic fortune makers control, on average, the 89% of the national economy.

Initially, the new and progressive African state tried to break down the backbone of rent collection that elevated the settlers above the indigenous population.

Gradually, however, most African states succumbed to internal and external counter attacks from the broad rent seeking international regime.

Many governments suspended, even, cancelled, their revolutionary schemes of rent-free distribution of wealth and retreated to the neoliberal brand of limited government. Others rather relegated to the background by joining the ranks of the strong rent-seeking regime through sharing wealth in the cover of free market and legitimate benefits.

This state of affair in Ethiopia is absent altogether thanks to the history of independence. This obviously gave a free hand for the Ethiopian state to redesign itself as an agency of national socio-economic development.