New Approaches to State Building in Africa: The Case of Ethiopia's Ethnic-Based Federalism

Abstract

The end of the Cold War and the crisis of socialism (statism) have ushered in the emergence of a “new” cycle of capitalism, which is characterized by wide ranging deregulation, privatization and vigorous globalization of capital (Cox 1994; Bienefeld 1994; Barber 1995). With this unfolding order, the role of the state in economic activity, including its protection of the vulnerable segments of society either through direct redistributive welfare mechanisms or by encouraging poverty-reducing and labor-absorbing economic activities, has come under serious attack. An ideology of free market and open global competition that increasingly limits the role of the state in economic activity has risen to prominence. According to some, a unified global economy has emerged and the global system has already entered a postnational stage (Barber 1995). While recognizing the intensification of interdependence among countries, many disagree that such a transformation has already taken place in the global system (Underhill 1994; Holm and Sorensen 1995; Boyer and Drache 1996). In most developing countries, however, the role of the state has been reduced to essentially adjusting national economies to the global economy instead of autonomously charting its own development strategy. Under the new global order, development in Africa and in the rest of the countries of the South is widely viewed to rest largely on integration with the global economy. Policy measures that are believed to advance integration with the global economy, including promotion of exports, attraction of foreign investments, correction of macroeconomic imbalances and decontrols of prices, exchange rates and imports are almost universally promoted in these countries.