Priming Public Policy to Combat Entrepreneurial Stasis in Ethiopia RL Vol XII No 317 MMXVIII

Priming Public Policy to

Combat Entrepreneurial Stasis in Ethiopia

Public Lecture - RL Vol XII No 317 MMXVIII

Costantinos Berhutesfa Costantinos, PhD

Professor of Public Policy & Sustainable Institutional Reforms

https://addisababa.academia.edu/CostyCostantinos

Abstract

Entrepreneurship and business development in a post-war/ post-command economy and under political transitions can be explained with reference to two institutional factors: institutions and policies that inform and influence the promotion of entrepreneurship & employment. The central hypothesis is that the relative strength of entrepreneurship, entrepreneurs and business organisations determines the wellbeing of the economy. They require a plural set of social and political institutions of which economic changes, downsizing government and privatisation of state owned enterprises which promote and protect rules of peaceful participation and completion in the market place.

Public policy intervention in the informal sector is argued based on some mix of equity, efficiency or political economy principles. Whatever, the basis of the argument might be there is a need for government policy intervention to promote economic growth and reduce pervasive poverty in an economy. Indeed, the socialist regime, which followed a centrally planned economic system since 1974, introduced excessive interventions and controls. After 1991, several policies were formulated and regulations promulgated relating to diverse social, economic and political issues that are hardly supportive of private sector development.

Hence, the ingredients of enabling environment for entrepreneurship development are avoidance of bureaucratic barriers, efficient and reliable infrastructure, expansion and/or establishment of financial institutions, establishment of training institutions and a healthy business-government relationship based on a stable political and regulatory climate. Grassroots businesses (small scale businesses) constitute the building blocks of entrepreneurial development anywhere in the world challenges that deserve urgent attention in developing entrepreneurial capabilities and the small scale sector in particular. These are lack of appropriate training system, lack of information and advisory service, financial constraints, lack of properly defined national policy, and that government institutions have been created to serve only the large businesses. Hence the state must focus on expansion of the role of civic associations sound and stable macroeconomic policy framework and develop programme support objectives, outputs & benchmarks to provide an enabling environment for the development and growth MSMEs, access to credit & finance, facilitation of access to other essential services needed by MSMEs, strengthen capacity of intermediary MSME support institutions, membership associations and advocacy groups to deliver quality services. The programme support to the overall programme is nationally executed within the framework of a partnership between public and entrepreneurial sector, reflected in the managerial and institutional arrangements.

Key words: entrepreneurship, employment, MSME, business organisations, public policy, partnership
See lecture here or  https://www.academia.edu/37686919/Priming_Public_Policy_to_Combat_Entrepreneurial_Stasis_in_Ethiopia_RL_Vol_XII_No_317_MMXVIII.pdf