MPIA-12093 Alternative Policy Strategy to ADLI for Ethiopia: A Dynamic CGE Framework Analysis


Ethiopia’s government has been following agricultural development led industrialization policy strategy (ADLI) since 1993. So far, this strategy has not brought about the anticipated food security and sustainable economic growth. The main government tools to address the ADLI strategy is allocating targeted public resource for agriculture sector that constitute 42 percent of GDP. The spending to agriculture is in terms of agricultural input subsidy, agricultural extension programs and rural infrastructure development. In light of this, we propose to test the validity of the ADLI and the alternative scenario in a dynamic CGE model framework. The proposed study would also attempts to provide a modern technical tool for assessing the rate of return of targeted public spending for year to come from 2010 to 2015, in its dynamic simulation. The simulation scenarios are divided in to two sets. The Business as us usual scenario will try to measure the change in growth and income attributed to a targeted government expenditure on agriculture; and the alternative scenario attempt to experiment government spending distributed equally across some targeted sectors. In the analysis process we would use a standard CGE model. The CGE model is neo-classical in spirit, with agents responding to price changes. The CGE model used in this analysis relies on EDRI’s social accounting matrix (SAM) of Ethiopia, based on 2005/2006 data. The SAM has more disaggregated accounts that will enrich the level of analysis. Our SAM has a wider range of activities, commodities and household categories. Public expenditure accounts are disaggregated by sector which will allow us to undertake the simulation scenarios.


Project leader: Lulit Mitik Beyene

Project researchers: Befekadu Behute | Ermias Engida | Zelealem Hailegiorgis Haile

Journal publication

Authors Co-Authors Title of paper Title of Economic Review Bibliographic references
Lulit Mitik Beyene Befekadu Behute,Ermias Engida,Zelealem Hailegiorgis Haile Public Investment In Irrigation And Training, Growth And Poverty Reduction In Ethiopia International Journal of Microsimulation

(2016), 9(1), pp. 86-108

Working Papers

Title Modified Size Comments Recommendations
Public Investment in Irrigation and Training for an Agriculture-led Development: a CGE Approach for Ethiopia 2013-04-04 2449.45KB 0 0

Policy Briefs

No policy briefs.

Final report

No final reports.


Title Modified Size Comments Recommendations
Alternative Policy Strategy to ADLI for Ethiopia: A Dynamic CGE Framework Analysis 2010-09-24 1790.18KB 0 0

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