Non-Inclusive Economic Growth of Ethiopia: Evidence from Grass Root Level

Abstract

Economic growth does not guarantee that all persons in a nation will benefit equally. Growth can bypass the poor or marginalized groups, confine in a particular spatial and sectoral setting and resulting in increasing inequality. This study examines rural household’s perception on how their livelihood status progressing in the last five years and what factors likely influence their perception. Data was collected from a random sample of 188 households living in Meskan District southern Ethiopia. The study finding revealed that 56 per cent of the respondents’ households perceive that their livelihood status was deteriorated and they are getting poorer and more vulnerable than in the past despite the Ethiopia economy grows on average at 5.4% for the period from 1999-2004. The results obtained using ordered probit model indicate that the more households endowed with large landholding size, livestock, draft animals and participate in agricultural extension programme; they are more likely to perceive that their livelihood is getting better off. Livestock and cereals diversification also positively and significantly influence them to perceive that their livelihood is getting along with the recent economic boom of the country. Hence, asset holding is the basic determinant in accessing growth benefits at household’s level and households who are already in the better off position are benefiting from the recent economic growth while asset poor households are excluded and push further to the edge of destitution.