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enterprises are bound to gravitate towards the big cities and the need for marketed surplus beyond that obtainable from the state farms would re-inforce the already existent pattern of extreme concentration of modern inputs in the few agriculturally developed regions of the country. Fourth, it is unlikely to generate the order of urban employment that is required over the plan period. This failure has various ramifications. For one, un-employment would probably become increasingly worse in the smaller towns or else, the migration into the prime cities from other smaller urban centres would increase without, of course, affecting the overall employment outcome. For another, this would mean an exacerbatian of the social costs of such urbanisation, manifest in the forms of an expanding urban lumpenproletariat, prostitution, and begging. Clearly, none of these phenomena should have an extended life in a socialist system. Furthermore, such unemployment would undermine the utility of the rationing system which would fail to reach this needy class on account of their exchange entitlement failure. To meet the distributional objectives, therefore, it would become necessary to rely increasingly on institutional devices of income sharing as a strategic rather than purely tactical option. Case C: An Alternative This offers an alternative strategic framework for a revised DTYP. The central principle underlying this concerns what is adopted as a trinity of objectives, namely, growth, distributional equity, and grassroots participating institutions. The earlier cases are crucially dependent upon an extended circular flow of investible resources extracted from agriculture and invested in industry and related sectors in the form of large projects. This involves little direct participation on the part of the savers and investments occur largely outside the units or sectors from which resources are extracted. Inevitably, aggregate domestic investments would depend upon the open and hidden contributions of peasant agriculture which would also remain a net contributor or loser in resource terms. It is arguable that this type of investment process is unsuited to an economy like Ethiopia where the level of available investible surplus is low and scattered in small denominations, where the degree of economic fragmentation is extreme, and where even the relatively well-developed centre is unlikely to be able to bear the burden imposed upon it. In addition, this strategy is unmindful of harnessing for productive purposes those investible rural resources which are not extractable and therefore not useable through the centralised and dichotomous investment process mentioned above. The collective framework, that is, Case C, takes the relative emphasis away from major industrial investments and places it on investments within the rural sector. The industrial shift involves the locational, size, product and technology dimensions, making the sector less import-intensive and more labour-intensive. Thus, even if the scale of investment was to be lowered, there might be few net losses (in GDP terms) to output, and perhaps even a net gain in terms of intermediate-level skill creation, as well as in direct and indirect employment generated. This would ease the urban poverty
DOI link for enterprises are bound to gravitate towards the big cities and the need for marketed surplus beyond that obtainable from the state farms would re-inforce the already existent pattern of extreme concentration of modern inputs in the few agriculturally developed regions of the country. Fourth, it is unlikely to generate the order of urban employment that is required over the plan period. This failure has various ramifications. For one, un-employment would probably become increasingly worse in the smaller towns or else, the migration into the prime cities from other smaller urban centres would increase without, of course, affecting the overall employment outcome. For another, this would mean an exacerbatian of the social costs of such urbanisation, manifest in the forms of an expanding urban lumpenproletariat, prostitution, and begging. Clearly, none of these phenomena should have an extended life in a socialist system. Furthermore, such unemployment would undermine the utility of the rationing system which would fail to reach this needy class on account of their exchange entitlement failure. To meet the distributional objectives, therefore, it would become necessary to rely increasingly on institutional devices of income sharing as a strategic rather than purely tactical option. Case C: An Alternative This offers an alternative strategic framework for a revised DTYP. The central principle underlying this concerns what is adopted as a trinity of objectives, namely, growth, distributional equity, and grassroots participating institutions. The earlier cases are crucially dependent upon an extended circular flow of investible resources extracted from agriculture and invested in industry and related sectors in the form of large projects. This involves little direct participation on the part of the savers and investments occur largely outside the units or sectors from which resources are extracted. Inevitably, aggregate domestic investments would depend upon the open and hidden contributions of peasant agriculture which would also remain a net contributor or loser in resource terms. It is arguable that this type of investment process is unsuited to an economy like Ethiopia where the level of available investible surplus is low and scattered in small denominations, where the degree of economic fragmentation is extreme, and where even the relatively well-developed centre is unlikely to be able to bear the burden imposed upon it. In addition, this strategy is unmindful of harnessing for productive purposes those investible rural resources which are not extractable and therefore not useable through the centralised and dichotomous investment process mentioned above. The collective framework, that is, Case C, takes the relative emphasis away from major industrial investments and places it on investments within the rural sector. The industrial shift involves the locational, size, product and technology dimensions, making the sector less import-intensive and more labour-intensive. Thus, even if the scale of investment was to be lowered, there might be few net losses (in GDP terms) to output, and perhaps even a net gain in terms of intermediate-level skill creation, as well as in direct and indirect employment generated. This would ease the urban poverty
enterprises are bound to gravitate towards the big cities and the need for marketed surplus beyond that obtainable from the state farms would re-inforce the already existent pattern of extreme concentration of modern inputs in the few agriculturally developed regions of the country. Fourth, it is unlikely to generate the order of urban employment that is required over the plan period. This failure has various ramifications. For one, un-employment would probably become increasingly worse in the smaller towns or else, the migration into the prime cities from other smaller urban centres would increase without, of course, affecting the overall employment outcome. For another, this would mean an exacerbatian of the social costs of such urbanisation, manifest in the forms of an expanding urban lumpenproletariat, prostitution, and begging. Clearly, none of these phenomena should have an extended life in a socialist system. Furthermore, such unemployment would undermine the utility of the rationing system which would fail to reach this needy class on account of their exchange entitlement failure. To meet the distributional objectives, therefore, it would become necessary to rely increasingly on institutional devices of income sharing as a strategic rather than purely tactical option. Case C: An Alternative This offers an alternative strategic framework for a revised DTYP. The central principle underlying this concerns what is adopted as a trinity of objectives, namely, growth, distributional equity, and grassroots participating institutions. The earlier cases are crucially dependent upon an extended circular flow of investible resources extracted from agriculture and invested in industry and related sectors in the form of large projects. This involves little direct participation on the part of the savers and investments occur largely outside the units or sectors from which resources are extracted. Inevitably, aggregate domestic investments would depend upon the open and hidden contributions of peasant agriculture which would also remain a net contributor or loser in resource terms. It is arguable that this type of investment process is unsuited to an economy like Ethiopia where the level of available investible surplus is low and scattered in small denominations, where the degree of economic fragmentation is extreme, and where even the relatively well-developed centre is unlikely to be able to bear the burden imposed upon it. In addition, this strategy is unmindful of harnessing for productive purposes those investible rural resources which are not extractable and therefore not useable through the centralised and dichotomous investment process mentioned above. The collective framework, that is, Case C, takes the relative emphasis away from major industrial investments and places it on investments within the rural sector. The industrial shift involves the locational, size, product and technology dimensions, making the sector less import-intensive and more labour-intensive. Thus, even if the scale of investment was to be lowered, there might be few net losses (in GDP terms) to output, and perhaps even a net gain in terms of intermediate-level skill creation, as well as in direct and indirect employment generated. This would ease the urban poverty
ABSTRACT
However, the central plank of the argument in Case C is the re-designing of the investment strategy for the rural sector and involves breaking away from the logic underlying the postulated dependence of y* on n. If this link could be broken, it might become possible to retain relatively high aggregate growth targets in any revised plan without jeopardising the self-imposed distributional constraints. Here it should be emphasised that in reality, agriculture supply bottlenecks are seldom absolutely rigid. However, this margin of supply response is already built into the target, n. But, in the case of the DTYP, it has been argued that n does not include the resource-generating effects of the monetisation - of hitherto self-sufficient, autarkic sub-systems in the rural sector - released through the device of inflationary deficit financing. This seems to have lent some respectability to an otherwise thoroughly discredited ruling-class instrument of financing development from the incomes of the poor. Especially in such an economically fragmented economy as Ethiopia, this dangerous option is more likely to result merely in higher inflation. Indeed, to the extent that the price elasticity of n is low (and it would rarely exceed 0.2-0.4 even in the long run), the scheme would be relying more on forced savings than on increased supplies.
