Reregulating the Ethiopian coffee sector : a multidimensional framework for analysis of the Ethiopian commodity exchange

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Reregulating the Ethiopian Coffee Sector

A Multidimensional Framework for Analysis of the Ethiopian

Commodity Exchange

Danielle Jiskoot 10001330

Master Thesis Political Science Internationale Betrekkingen

Development in comparative perspective 26-6-2015

Supervisor: Farid Boussaid Second reader: Luc Fransen

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Preface

This thesis is the result of five months extensive research in the Ethiopian coffee sector. Without little relevant foreknowledge, the research has showed to be challenging, but very rewarding. The opportunity to travel to Ethiopia and conduct fieldwork has added an extra dimension to the master thesis project. I came to notice that Ethiopians do not often speak their mind, but are amazingly helpful and kind people. Overall, the project has brought me new opportunities, a better insight in the Ethiopian coffee sector, and greater respect for the process of the coffee chain.

There are a few people I would like to express my gratitude to. First of all, many thanks to all the people I was able to interview before, during, and after my trip to Ethiopia. Special thanks for Menno Simons, who has helped me get started and arranged a couple of important contacts for me. Moreover, thank you Farid for being a great teacher in the thesis process. Your relaxed attitude and ideal planning helped me reach the finish line in time. Furthermore, I would like to thank my dear family, friends, and Tim for standing by my side and being my support. I would like to express extra gratitude to Jim Brands and Jostie Veldhoven, who helped checking my thesis in the final phases. Last but not least, I would like to mention my aunts and grandmother, Sas, Anne, and Groot-Jeanine, who passed away in the process to and during my master program. You were a true inspiration to me. Rest in peace and you will always be remembered.

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Abstract

Since the 1980’s, market liberalization has been opted as at least part of the solution for poor economic growth in developing countries. In this same respect, the World Bank and IMF established The Structural Adjustment Program. The implementation of the project resulted in critical responses, such as the notion that liberalization might lead to the establishment of institutional frameworks to benefit political incumbents. Reregulation projects within the liberalized market sectors can create upward accountability towards sitting incumbents and disregard the influence of societal actors in the policymaking process. Moreover, the type of political institutions can enhance the position of elites or distribute benefits for the masses. Consequently, this research has aimed to find the influence of political institutions on the establishment of a reregulation project, the ECX, in the Ethiopian coffee sector in the post-liberalization period. The combination of both theoretical approaches into a multidimensional framework for analysis provides a micro-meso-macro level research. The empirical analysis showed that Ethiopian political institutions are regarded extractive and the ECX as a reregulation project can be referred to as crony capitalist. Furthermore, a feedback loop was created between the extractive political institutions and the crony capitalist ECX. This suggests that the ECX as a reregulation project in the Ethiopian coffee sector provides an unsustainable foundation for economic growth.

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List of maps, tables and figures

Map 1.1: Federal States of Ethiopia Page V

Map 1.2: Ethiopian coffee regions Page V

Table 2.1: SAP implemented liberalized coffee markets Page 8

Figure 2.1: Reregulation project framework Page 9

Figure 2.2: Multidimensional framework for analysis Page 16 Figure 2.3: Pluralism questions Freedom House Page 17 Table 2.2: Independent variables reregulation project Page 19 Figure 2.4:Multidimensional framework for analysis Page 20 Table 5.1: Ethiopian coffee prices annually Page 37 Figure 5.1: Actors in the Commodity Exchange System Page 39 Graph 5.1: Ethiopia’s coffee export in US$ millions Page 41 Figure 5.2: The Ethiopian coffee sector chain Page 46 Figure 5.3: Power and Duties of the Authority and Board of Directors Page 54

Figure 5.4: Organizational Structure ECX Page 55

Graph 5.2: Number of coffee export firms in Ethiopia Page 62

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List of abbreviations

IBRD International Bank for Reconstruction and Development CLU Coffee and Liquoring Unit

CIDA Canadian International Development Agency ECX Ethiopian Commodity Exchange

EPLF Eritrean Peoples Liberation Front

EPRDF Ethiopian People’s Revolutionary Democratic Front ETLI Ethiopian Trademark and Licencing Initiative

EU European Union

IMF International Monetary Fund ICA International Coffee Agreement

IFPRI International Food Policy Research Institute IFAD International Fund for Agricultural Development IVR Interactive Voice Response

ONLF Ogaden National Liberation Front OLF Oromo Liberation Front

PA Peasant Associations PC Production Cooperatives SAP Structural Adjustment Program SAL Structural Adjustment Loans

SNNP Southern Nations, Nationalities, and People’s Region SC Service Cooperatives

UDJ Unity for Democracy and Justice Party

USAID United States Agency for International Development WPE Workers Party of Ethiopia

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Maps of Ethiopia

Map 1.1: Federal States of Ethiopia

Source: (Website Ethiovisit)

Map 1.2: Ethiopian Coffee Regions

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Chapter 1. Introduction

“France has really nice toll roads. You can be in Spain half a day faster coming from the Netherlands, but it will cost you 100 euros. You have the possibility to save these 100 euros and take the shortcuts through the country. As the manager of my car I get to choose. As an entrepreneur I have a choice. A farmer doesn’t get a choice” (Interview Ben van Ampting, April 16, 2015).

Since the 1980’s, a raising awareness for economic growth in developing countries has spiked the incentives for market liberalization policy reforms. The rising focus was centred around the notion that a large share of the ability for a market’s economic growth depends on a competitive internal structure and contributory external environment

(Getnet, 2008: 240). As a response, the Structural Adjustment Program (SAP) from the World Bank and the IMF was set up as an instrument to effectively guide countries towards more economic growth with liberal market objectives (Geda, 1999: 6). The general components of this new program were focussed on the macro economic structures, such as trade liberalization, support services to private exporters, and a simplified tariff structure (Ibid: 11). As many heralded the victory of liberal market imperatives, some warned for the consequences. Ethiopia implemented the SAP in 1992 and opened up one of its most important export product sectors to international

competition: coffee. Accounting for approximately 34% of the country’s yearly total exports and 51% of the African total export, Ethiopia solidified its prominent position as main African coffee exporter. The product has gained worldwide praise over the years due to its complex characteristics and rounded citrusy aftertaste. Nearly 15 million Ethiopian people are relying on some aspect of the coffee production process (Ruben and Heras, 2012: 465; EcoBank, 2014:1). However, the coffee crisis in 2002 highlighted the weaknesses of the international position of the sector, with historically low export prices. In the eyes of many, it showed that market reform with the removal of policy distortions

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was not sufficient to achieve the growth that the Ethiopian market needed (Gabre-Madhin and Goggin, 2005: 3). Reregulation within the market called for a central economic institution for the collection of commodities in order to guarantee export incomes for coffee producers and generate a better bargaining position. As a result, the Ethiopian Commodity Exchange (ECX) started live trading on April 24, 2008 (Paulos, 2007: 45).

Regarding the reregulating of a liberalized market, Richard Snyder (2001) mooted that neoliberal policies generate opportunities for political incumbents to

construct new market institutions for extended governance, instead of unleashing market forces. A liberal sector creates the perfect environment for the expansion of authority (Snyder, 2001: 3). Similarly, Daron Acemoglu and James Robinson (2012) discuss the unsustainable nature of political institutions that entail elite centred motivations in both political and economic institutions (Acemoglu and Robinson, 2012: 80). Combining the two theoretical approaches provides a solid combination to analyse both the political institutional field on the macro level political institutions of Ethiopia, as well as a narrowed down meso and micro view on the Ethiopian coffee sector and the ECX as a reregulation project. Accordingly, this thesis will attempt to analyse the influence of political institutions on the establishment of reregulation project in a post-liberalization period.

Research question

After introducing the central aim of this research, the central research question will be as follows:

What is the influence of political institutions on the establishment of a reregulation project, the ECX, in the Ethiopian coffee sector in the post-liberalization period?

The definition of political institutions is derived from George Tsebelis (2002), stating that political institutions are a combination of political systems, party systems, and parties in the political sphere (Tsebelis, 2002: 34). Reregulation follows the description of “the deployment of state policies to facilitate privatisation and marketization” (Castree, 2008: 142).

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Sub questions will help finding an answer to the central research question and give an overview of the micro, meso, and macro perspectives of the ECX as a

reregulation project in the Ethiopian coffee sector. In this regard, this research provides a new outlook on the ‘micro-meso-macro’ analysis by Dopfer, Foster, and Potts (2004), which connects three levels in economics by rules and interconnection. The micro level consists of the local environment and rule actualizations along interconnectivity,

efficiency and efficacy, and change of which an accumulation of all elements creates the meso structure. The macro level is an accumulation of meso units (Dopfer et. al., 2004: 267). In this article, we look at the interconnectivity between several levels of actors in the coffee sector in Ethiopia. The analysis will provide the macro (political institutions), meso (coffee sector), and micro aspect (ECX). Accordingly, the sub questions are divided in three levels and will be as follows:

(Macro)

 What is the history of the Ethiopian political institutions?

 What types of political institutions are present in Ethiopia today?

(Meso)

 What is the history of the Ethiopian coffee sector?  What were the liberal reforms in the (coffee) markets?

(Micro)

 What is the ECX?

 Why was it established and how does it function?

 What kind of reregulation project is the ECX?

The sub questions will partially be answered in the case background, as well as in the analytical parts of this research. Chapter 2 will provide the utilized dependent and independent variables in order to answer the sub questions and central research question. Chapter 3 will in turn provide the research method used to apply the variables in the analysis.

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Relevance

Currently, relatively little research has been conducted to investigate the role of the ECX as a reregulation project for the Ethiopian coffee sector. However, scholars are

increasingly developing an interest for the new economic institution. For example, Jay Balgobind (2015) has included the reregulation project to the global value chain of the Ethiopian Trademark and Licencing Initiative (ETLI), placing the institution in a broader global context. Celeste Aida Molina Fernández (2010) delimited this scope of analyses and focussed mainly on the performativity of the Ethiopian market with the ECX. Using a different approach, Gian Nicola Francesconi and Nico Heerink (2010) investigated the selective inclusion of market cooperatives in the Commodity Exchange as a means of escaping rural poverty. Surprisingly, no researches have attempted to explain the content of the processes leading up to the establishment of the ECX, as well as the policy

characteristics of the reregulation project afterwards. As the new common ground for coffee traders and buyers, it is considered of great importance to get a full understanding of this innovative project.

Furthermore, it is not only fruitful to understand the establishment processes, but it will also predict the future sustainable value for the Ethiopian coffee sector. As will be discussed in the following chapter of this article, the character of the interconnectivity of political and economic institutions within a nation will predict the contribution to

sustainable growth in an economy after market liberalization. In this respect, this research presents a niche approach of the Ethiopian coffee market.

Additionally, by providing a multidimensional framework for analysis, this research can pose an original view on the implementation for leading post-liberalization

reregulation projects in the coffee sector. Analytical shortcomings in already existing theories can generate the search for common grounds and combinations with other leading theories.

The structure of this research is shaped as follows: first, a theoretical framework will discuss market liberalization in developing countries and the Structural Adjustment Program (SAP) of the World Bank and IMF. Additionally, the two leading theories regarding reregulation project and political institutions will be presented. Moreover, this chapter will accurately present the set up of the multidimensional framework for analysis

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and the operationalization of the dependent and independent variables. Thereafter, a methodology chapter will define the research method, data collection, and use of sources in the empirical chapters. The empirical analysis will be divided in two large chapters, which both commence with a case background. The first chapter contains the analysis for the type of political institutions in the Ethiopian case study. The second part will then provide an analysis for the ECX as type of reregulation project in the Ethiopian coffee sector. Thereafter, the conclusion will answer the general research question and further elaboration of the key findings. Finally, the concluding words of this thesis are the generalizability and brief policy recommendations.

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Chapter 2. Theoretical framework

This chapter will be devoted to relevant theories regarding the research aim. In succession, (coffee) market liberalisation in developing countries, the Structural

Adjustment Programs, Richard Snyder’s reregulation project framework for analysis, and Daron Acemoglu and James Robinson’s types of political institutions will be discussed. The final subchapters provide an extensive review of the multidimensional framework for analysis.

2.1 Market liberalisation and the Structural Adjustment Program

A growing awareness of a lack of economic growth in developing countries due to poor market policies gained significant attention in the 1980’s (Dollar and Svensson, 2000: 3). Especially after the Latin American debt crisis in 1982, reshaping policy views for development strategies, growth policy, and long-term growth became increasingly relevant. The ‘inward’ oriented policies, aimed primarily at strict domestic market policies, were aimed to no longer be sustainable (Edwards, 1993: 1359). The world started to develop a focus away from protectionism and moved towards the realization that market liberalization might offer at least part of the solution for economically lagging countries (Dornbusch, 1992: 70). The leading example was South East Asia, in which outward market policies led to relatively high economic growth, compared to Africa and South-America, where many nations still held on to import substitution and a strong focus on the domestic market (Edwards, 1993: 1359). According to Joseph Stiglitz (2000), the expected positive aspects of the movement towards liberalized markets lay in the appliance of the standard neoclassical model, focussing on efficiency effects and that when the gains are big enough, the benefits would eventually trickle down to the poor or the government would take active control to ensure the poor would not be harmed (Stiglitz, 2000: 1076). A series of crosscountry studies have proven that market liberalization would lead to faster economic growth (Sachs and Warner, 1995; Vamvakidis, 1999; Levine, 2001). Within this same consideration, the Structural Adjustment Program (SAP) was established. The introduction of the instrument was a disjointed effort for a quick fix of the African economic crisis of the 1980’s, the Latin American debt crisis in 1982, the backdrop of the second oil shock in 1979, and

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limit payment difficulties. Trade protection reforms and price incentives for efficient recourse use were the central aims to receive a Structural Adjustment Loan (SAL) that would prevent further account deficits of developing countries and risking current investment programs (Easterly, 2003: 2). The program entails a varied set of reforms, focusing mainly on macroeconomic stabilization through stable price mechanisms, privatization, improving free market governance away from state intervention, and economic output on direct export. The SAP trade programs as such have been carried out in almost all African countries (Geda, 1999: 7).

Market liberalization with the SAP objectives was also directly being targeted at one of the most important global exports products: coffee. With 70 coffee producing countries, and approximately 26 million people depending on the process in 52 countries, this good globally remains one of the most vital ones (Stanculescu and Scholer, 2011). African countries account for a total of 12% of the total global supply of coffee and many approved with SAP implementation in the coffee sector (Mafusire et. al., 2010: 1).

Rwanda, for instance, adopted the program in 1990, Angola in 1991, and Uganda and Ethiopia in 1992 (Boudreaux and Ahluwalia, 2009: 153; Krivonos, 2004: 21). Due to the sharp decline of commodity prices during the 1980’s, many coffee-producing countries saw no other choice but to undertake liberalization measures. They were often forced to look at international organizations and donor countries for financial assistance.

Consequently, the implementation of SAP conditionalities served as a hopeful step towards economic growth (Akiyama in Baffes et. al., 2001: 87). Table 2.1 shows the SAP implementation in multiple coffee sectors. Some doubted the effects of the SAP’s in Africa and opinions on the market outcomes remain divided, criticizing mainly the dominant necessity of trade liberalization, urgency of financial reform, and distributional implications (Herbst, 1990; Rodrik, 1990; Kapur et al., 1997). A large contributing factor for growth has been rural market deregulation and the incorporation of social

conditionality and provisions that aim at protecting welfare service in areas with high levels of poverty (Konadu-Agyemang, 2000: 470). However, the growth per capita of 25 of the 44 African SAP countries turned out to be negative from 1985 until 1994 (Adedji, 1999: 523). Only 22 African countries were still actively engaged with the SAP in 1997 (Noorbaksh and Paloni, 2001: 479).

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Table 2.1: SAP implemented liberalized coffee markets

Country Year of SAP

implementation

Change in role of parastatal agency

Brazil 1990 From price stabilization to industry supervision

Ethiopia 1992 From state trading to industry supervision; mandatory auction

Kenya 1993 Producer dominated, reforms limited; mandatory auction

Tanzania 1994 From state trading to industry supervision; mandatory auction

Colombia 1995 Producer dominated, reforms limited

Mexico 1993 From state trading to industry supervision

India 1996 From state trading to industry supervision

Uganda 1992 From state trading to industry supervision

Madagascar 1988 From state trading to industry supervision

Togo 1996 From state trading to industry supervision

Angola 1991 From state trading to industry supervision

Cameroon 1994 From state trading to industry supervision

Central African Republic

1991 From state trading to industry supervision

Ghana 1992 From state trading to industry supervision

Source: (Krivonos, 2004)

One of the effects of economic downfalls due to market liberalization is the shaping of new economic institutions, which aim to fulfil the appearing void of direct government intervention. In Africa, political leaders tend to institutionalize their regimes by establishing webs of patron-client relations in order to maintain political control over the market. African regimes regularly influence markets through direct state intervention in order for constituencies to receive a flow of resources so that politicians maintain office (Herbst, 1990: 949). Andrew Moravcsik (1997) stated that institutions are

generally a representation of a subset of societal forces, rather than an instrument through which political leaders strengthen their positions (Moravcsik, 1997: 518). Contributing to these notions, the following reregulation project framework presented by Richard Snyder will provide a valuable method for analysis to discover the motivations behind

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2.2 Reregulation project framework

Mexico implemented almost all of the neoliberalist SAP objectives in 1982 and started a process of newly developed institutions. Richard Snyder aimed to effectively look for the character of the institutional reregulation of the coffee sector in ‘Politics after

Neoliberalism: reregulation in Mexico’ (2001). In 1989, the Mexican Coffee Institute (INMECAFE) was abolished because of the liberalization of the Mexican market. When the government launched large-scale deregulation of the agriculture sector in the region, new actors sought to control the policy areas that were opening up. A remarkable development was new institutions being introduced to regulate the market instead of letting the free market function (Snyder, 2001: 21). Snyder provides a framework through which the institutional aims of these reregulation projects can be analysed.

The primary focus of the theory is that market regulation gives politicians strong incentives to harness regulatory policy for political purposes. That makes it possible to distribute rationed favours, privileged access, and individual exceptions to general rules, thereby helping to generate the resources by which to govern (Ibid: 7). The politics of reregulation frameworks are shaped as follows:

Figure 2.1: Reregulation project framework

Source: Interpretation of (Snyder, 2001)

The strategies, which are responsible for this reregulation project, have three leading variables: Societal Forces, Regime Institutions and Policy Repertoires. The first variable, Societal Forces, helps explain the range of options that is available for reregulation policies. The configuration of societal interests in a policy area can constrain politicians’

Reregulation project

Societal Forces Regime

Institutions

Policy Repertoires

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reregulation strategies due to a limited range of feasible policy options. Mapping the policy preferences of societal actors serves as an important step to explain reregulation strategies. However, this component cannot explain policy strategies by itself, since it is politicians, not interest groups, who are authorized to make regulatory policy.

Furthermore, the responsiveness of politicians to interest group demands depends on the political institutions present (Snyder, 2001: 8). The second variable, Regime Institutions, determines who holds authority to make regulatory policy. In unitary regimes, where one single power dominates the state, this often means that reregulation is a territorially more uniform process. In federal systems, the reregulation processes may unfold differently across subnational units if authority over aspects of reregulatory policy is spread among them. This variable looks at who holds authority to make regulatory policy and therefore has an important impact on reregulation. It also defines the structure of the policy making process. This structure can help determine what has to be done to achieve the policy objective. Finally, the responsiveness to social interests helps determine the incentives incumbents have to feel accountable. Elected officials often feel the necessity to represent citizens. On the other hand, nondemocratic systems or centralized parties please political elites, not societal groups (Ibid: 9-10). Regime Institutions holds a strong links with the aspects of the theory that follows in the next section. In that respect, this thesis will then refer back to this variable and explain the similarities. The third and final variable, Policy Repertoires, presents the framework of beliefs, values, and ideas that describe a policy choice and its implementation. The repertoires involve conceptions about the proper role for government and the means for government intervention. The influence of these repertoires on policy choices increases with the autonomy the political incumbents get from societal forces. (Ibid: 11).

Snyder provides two outcomes of reregulation project types: crony capitalist or neocorporatist. If institutions give politicians weak incentives to serve societal interests, they have significant freedom to choose reregulation policies. By contrast, if they generate compelling incentives to respond to societal interests, societal demands have strong influence on the politicians’ strategies. In this view, crony capitalist reregulation projects looks to shape monopoly advantages if elites dominate the political arena and successful implementation will result in oligarchic outcomes. On the other hand,

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neocorporatist reregulation projects are led by incentives to deliver economic benefits to a group. When mass-based groups dominate, politicians tend to pursue a neocorporatist reregulation aim (Snyder, 2001: 12). Interactions between societal groups and politicians have to be analysed in order to explain the institutional outcomes of reregulation. This interactive perspective connects reregulation projects launched form above by

incumbents in response to demands from below by societal groups (Ibid: 14). Thus, neocorporatist projects will involve strong group demands from Societal Forces, a relative power in policymaking for the masses in Regime Institutions, and a significant autonomy of incumbents from societal groups in Policy Repertoires. If any of these features falls behind, the project will be referred to as being crony capitalist.

Snyder’s complete reregulation institutional framework around the reregulation project results in two different institutional outcomes: oligarchic, or exclusionary, policy frameworks, or mass-based, participatory, policy frameworks. Exclusionary frameworks are inefficient and create monopolies for a small group of elites. Participatory

frameworks generate cooperation between societal organizations and the government, through which economic efficiency and performance is guaranteed (Ibid: 12). The frameworks of participatory or exclusionary reregulation are not only shaped by the kind of reregulation project. The reregulation framework presented by Snyder contains two steps towards the formation of resulting institutional outcomes. After the implementation of the reregulation project, Snyder analyses the reregulation strategies by politicians and relative group power. However, this second part can be hard to measure in parts where group force is almost absent. In Ethiopia, civil society is still relatively small and decision makers in general are relatively reluctant to respond to or legitimize its claims (Rahmato in: Zewde and Pausewang, 2002: 118). Therefore, group power and politicians’ responses will be used to analyse the change of societal preferences after the project establishment and analyse the degree of influence from societal groups on policymaking processes. In other contexts, this might be an equally helpful tool, regarding apparent impossibilities to oppose to governmental institutional changes in some state regimes.

Although Snyder’s framework presents a well-structured analysis for this case study, it seems to lack the ability to consider both the reregulation project and broad political institutional context regarded necessary to provide a complete analysis of the

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underlying political motives present during reregulation from Regime Institutions and Policy Repertoires. In other words, a project presents narrow case study, but it is fruitful to consider the influence from the nations political background. In order to fill this gap, the following theory by Daron Acemoglu and James Robinson will be linked to the framework.

2.3 Political Institutions

In ‘Why Nations Fail: the origins of power, prosperity and poverty’, Daron Acemoglu and James Robinson (2013) emphasise that the level of a nation’s prosperity relies upon political foundations. They are the rules that govern incentives in politics (Acemoglu and Robinson, 2013: 79). The authors distinguish two kinds of political institutions:

extractive and inclusive. Extractive political institutions support institutions that keep elites in place by building the power of those who benefit from extraction of benefits from the masses. Inclusive political institutions, on the other hand, are those that allow and encourage participation of societal actors. They create inclusive markets, in which technology and education are provided, and thus lead to sustainable growth. Inclusive political institutions tend to uproot economic institutions that erect entry barriers and suppress the functioning of the market so that only a few benefit and are a stepping-stone towards sustainable growth. Extractive political institutions keep elites in a powerful position and exclude a large part of society for economic benefits. (Ibid: 77). A

similarity can be found with the Regime Institutions variable from Snyder’s reregulation project framework as mentioned before. The exclusion of the masses for political

engagement refers back to the notion that centralized parties tend to satisfy elite power. On the contrary, elected officials will feel a need to represent the people and create benefits, thus encourage participation.

Acemoglu and Robinson describe the synergy between economic and political institutions that makes up a strong feedback loop. Political institutions may allow elites to perform political power over economic institutions with little opposing forces. In turn, extractive economic institutions will enrich these same elites. According to the two authors, nations fail today because political and extractive economic institutions do not create the incentive needed for people to save, invest, and innovate. The result is

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economic stagnation, even famine and mass displacements, which makes many countries poorer today than sixty years ago (Ibid: 372). Inclusive economic institutions are forged on political foundations that make power largely distributed in society and constrain arbitrary exercise. In this respect, the masses will benefit from economic outcomes (Ibid: 82).

Political institutions determine who has power in society and to what ends this power can be used. In this regard, it is important to illustrate exactly how these

institutions can be labelled as inclusive or extractive. According to Acemoglu and

Robinson, it all depends on a sufficient degree of centralization and pluralism. In order to be referred to as inclusive, a political institution has to be sufficiently centralized and pluralistic, thus creating a political system in which absolute power cannot appear to govern. When either of these conditions fails, the institution has an extractive character (Ibid. 80). What the exact measures for this distinction are not clearly provided by the authors. However, they do provide a valuable example that explains the importance of these two factors. The authors point towards the case of Somalia, in which political power is distributed in such a pluralistic way that there is no central authority or control. Without any political centralization, a state will descend into chaos sooner or later. On the other hand, complete centralization in the hand of one state party leads to an absolutist regime (Ibid, 81).

In short, Acemoglu and Robinson emphasise the lack of sustainable growth within a state due to the extractive character of the political institutional foundations. A

sufficient degree of pluralism and centralization needs to be in place in order to generate valuable growth and an inclusive character of political institutions. The following section permits us to evaluate the linkage between the theories posed by Richard Snyder and Daron Acemoglu and James Robinson. Accordingly, the combination will be motivated. 2.3.1 Theories compared

First, it is interesting to review the differences between the above posed theories by Snyder and Acemoglu and Robinson. While Snyder puts a stronger emphasis on a case specific reregulation project after liberalisation of a sector, Acemoglu and Robinson provide the opportunity to take a more general look at a nation’s institutional field.

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the reregulation project when applied to a case. Acemoglu and Robinson give us a general idea of the concept of the institutional arena within a country and give us the handlebars to take a helicopter view at the complete political institutional framework. Additionally, Snyder analyses the results of neoliberal reregulation, while Acemoglu and Robinson do not take into account that specific critical juncture for reform. In this view, the two theoretical approaches have complementing elements for this research. The narrowed down perspective of Snyder creates a clear image of a newly shaped institutional reregulation project in a liberalized sector. However, to strengthen the motivations behind the project, it is valuable to also take into account the broader political spectrum nationally and beyond the project. In this respect, Acemoglu and Robinson provide complementing elements to explain the kind of reregulation project according to Snyder.

The similarities between the two theories become rather clear when comparing the types of reregulation or institution outcomes. Most importantly, both works

distinguish outcomes that are either elite sustaining or mass-based outcomes. Snyder’s neocorporatist reregulation project focuses on economic benefits for the masses,

compared to Acemoglu and Robinson’s inclusive institutions that promote the exact same objective. On the other hand, crony capitalist reregulation projects tend to shape

advantages for elites, similar to extractive institutions build up power for the elites. The resemblances are uncanny and provide a solid ground on which the two theories can be utilized to create a new and stronger framework for analysis.

In short, the more general outlook on political institutions from ‘Why Nations Fail’ can complement the specific economic reregulation project analysis of Richard Snyder and provide an overview of the political context. The feedback loop between economic and political institutions as described in ‘Why Nations Fail’. Will be tested accordingly and reviewed how political institutions influence economic reregulation projects. The following section will provide the multidimensional framework for analysis, and the operationalization and conceptual definitions of the variables. 2.5 Multidimensional framework, conceptual definitions, and operationalization

In order to effectively put the separate variables together in a diagram, it will be fruitful to first pose the multidimensional framework for analysis and discuss the rationale behind

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the combination of the theories. Moreover, a description of the dependent and

independent variables will have to be established in order to effectively explain the causal mechanisms involved. Then, the conceptual definitions will clearly state how the

variables will be analysed.

2.5.1 Multidimensional framework for analysis

It is important to stress again that the central aim of this research is to investigate the influence of political institutions on the reregulation project. In this respect, the dependent variable is the type of reregulation project, with either a crony capitalist or neocorporatist outcome. Directly connected to the dependent variable are the three independent key variables as posed by Snyder: Societal Forces, Regime Institutions, and Policy Repertoires. In order to deepen the understanding of the political institutional context at the Ethiopian national level, we will add the type of political institutions in the reregulation framework. After all, it is the political institutions that determine who has power and to what ends the power can be used. They can enable the elites controlling political power to choose economic institutions without any constraints or opposing forces (Acemoglu and Robinson, 2013: 80). It is therefore important to take into account the macro level institutional arena when analysing the micro level reregulation project within the meso level coffee sector. Comparing it to Snyder’s variables, this means that the type of political institution and its degree of pluralism and centralism will directly affect not only the way in which the policies are implemented (Regime Institutions), but also connects to the interpretation of the role for government in the project (Policy Repertoires). In that manner, the type of political institutions has a direct effect on those independent variables leading towards the type of reregulation project. Societal Forces can be shaped independently and do not have to be in direct connection to political institutions. Considering these rationales, the diagram with all variables included looks as follows:

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Figure 2.2: Multidimensional framework for analysis

The type of political institution will be analysed in the macro level context of Ethiopia. The independent variables from Snyder will then narrow down the scope of this research and move towards the micro and meso level of the case study: the Ethiopian Commodity Exchange in the Ethiopian coffee sector. Accordingly, the expectation for this research is that inclusive political institutions create a feedback loop with neocorporatist reregulation projects, and extractive political institutions generate a similar link with crony capitalist economic institutions.

2.5.2 Conceptual definitions and operationalization

In order to structure this segment, it will be divided in two parts. First, we will look at the variables shaping the type of political institution. Thereafter, the three independent variables leading towards the reregulation project will be discussed along with their method of implementation.

As touched upon in subchapter 2.3, a degree of pluralism and centralization within political institutions is required in order to be referred to as inclusive. But how exactly can we investigate these features? For the first variable, pluralism, ‘Why Nations Fail’ provides a rather unclear definition of this requirement for inclusive institutions. It states that political institutions that distribute power broadly and subject it to constraints are pluralistic. Political power rests with a broad coalition, not a narrow group

(Acemoglu and Robinson, 2013: 80). It is however required to have a specified definition of the concept for the analysis. Instead, we use the extensive explanation of the concept as posed by Giorgi Shaknazarov (1982):

Reregulation project Societal Forces Regime Institutions Type of political institution Policy Repertoires Type of political institutions

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“Pluralism is the guarantee that the diversity in modern society of ideological and spiritual trends, social groups and institutions, economic interests and alliances, professional roles and functions, political organizations, parties and instances will be recognized and approved, and that they will have scope for free activity to the extent to which they, for their part, approve and support the state and

constitutional order that is necessary for all plurality of forces to enjoy their rights and that they will have protection and opportunity to act in an environment of mutual respect, exchange, competition, and conflict” (Shaknazarov in: Ali, 2009: 666).

Also, due to a lack of operationalization for this variable in ‘Why Nations Fail’, the empirical evidence for the degree of pluralism within a state will be measured according to a set of questions as posed by Freedom House, which will be embedded in the content. Originally, Freedom House measures the variable along with ‘political participation’. However, this research only maintains the relevant questions for pluralism. Figure 3.4 present the questions as posed by Freedom House:

Figure 2.3: Pluralism questions Freedom House

Source: (Freedom House, 2015)

1. Do the people have the right to organize in different political parties or other competitive political groupings of their choice, and is the system open to the rise and fall of these competing parties or groupings?

 Do political parties encounter undue legal or practical obstacles in their efforts to be formed and to operate, including onerous registration requirements, excessively large membership requirements, etc.?

 Do parties face discriminatory or onerous restrictions in holding meetings, rallies, or other peaceful activities?  Are party members or leaders intimidated, harassed, arrested, imprisoned, or subjected to violent attacks as a

result of their peaceful political activities?

2. Is there a significant opposition vote and a realistic opportunity for the opposition to increase its support or gain power through elections?

 Are various legal/administrative restrictions selectively applied to opposition parties to prevent them from increasing their support base or successfully competing in elections?

 Are there legitimate opposition forces in positions of authority, such as in the national legislature or in subnational governments?

 Are opposition party members or leaders intimidated, harassed, arrested, imprisoned, or subjected to violent attacks as a result of their peaceful political activities?

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After having operationalized pluralism, the conceptual definition and

operationalization of centralization will be posed. Following the case examples in ‘Why Nations Fail’, centralization is related to the concentration of power in the political system. Acemoglu and Robinson point out that an extensive spread of power may lead to a loss of control and chaos of a country, like occurred in Somalia. The primary concern is whether state building is collected at a centralized point instead of among many groups (Acemoglu and Robinson, 2013: 81). Again, an extensive operationalization appears to lack in ‘Why Nations Fail’. Following Yongnian Zheng (2009), centralization remains a concept that will never be fully defined. Instead, scientists have to look for the

distribution of power between different entities. For this, Zheng provides two concepts of power to analyse the degree of centralization: the ‘power-over’ and ‘power-to’ (Zheng, 2009: 4). The power-over is defined as getting others to do what you want them to do. Based on this, Robert Dahl described it as follows: “A has power over B to the extent that he can get B to do something that B would not otherwise do” (Dahl in: Zheng, 2009: 3) On the other hand, power-to only indicates the capability or ability to act. As Michael Foucault would argue, the transformation of power from a potentiality to an actuality depends on he existence of power technologies and mechanisms. Described otherwise, whether A has power over B depends on the existence of mechanisms and technologies, which enables A to exercise power over B (Zheng, 2009: 4). Looking at the power-over and power-to from political institutions will indicate whether or not a level of

centralization is present. The degree of pluralism and centralization will be analysed accordingly and a short conclusion will suggest whether the political institutions are to be considered inclusive or extractive.

Having provided the operationalization of the political institutions, it will then be important to exemplify the independent variables leading towards the type of reregulation project. The first, Societal Forces, is defined as the policy preferences of societal actors and their organization into groups (Snyder, 2001: 8). In this research, the societal forces are the smallholder coffee farmers, the coffee cooperatives, ‘Akrabies’, and coffee producers involved in the coffee process. Sub chapter 5.4 of the analysis will further justify the inclusion of these actors in the variable. The second variable, Regime

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authorative decisions are made and who may participate in the decision making process (Collier, 1979: 402). In order to avoid confusion with the macro level political sphere, this variable will be labelled ‘Sectorial Regime Institutions’ in the reconsidered framework for the reregulation project to clarify the focus on the regime institutions within the coffee sector. Policy Repertoires, the third and last independent variable, observes coherent frameworks of beliefs, values, and ideas that prescribe a course of policy choice and implementation (Snyder, 2001: 10). The following table presents the operationalization through which all three variables are applied in the analysis:

Table 2.2: Independent variables reregulation project

Source: (Snyder, 2001)

It is useful to map out the reconsidered framework that will be used for the empirical analysis. Figure 3.5 has taken into account all factors that have shaped the theoretical map and the way in which the analysis will be executed.

Closing this section, we get to chapter 3, which elaborates and substantiates the methodology of this research. Chapter 3 includes the appropriate research method to implement the multidimensional framework for analysis, a case justification, mapping out of the sources, ethical considerations and research obstacles.

Independent Variable Questions:

Societal Forces  What are the societal actor preferences?

Sectorial Regime Institutions

 Who holds authority to make regulatory policy?  What is the structure of the policy making process?  What is the responsiveness to societal interests?

Policy Repertoires  What are the perceptions on the role for government?

 What are the perceptions on the appropriate means of government intervention?

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Societal Forces

 What are the societal actor preferences?

Figure2.4: Multidimensional framework for analysis

ECX (micro)

and coffee sector (meso)

---

Ethiopian Political

Institutions

(macro

Type of reregulation project

Crony capitalist or neocorporatist

Sectorial Regime Institutions

 Who holds authority to make regulatory policy?  What is the structure of the policy making process?

 What is the responsiveness to societal interests?  What are the connections to the political institution?

Policy Repertoires

 What are the perceptions on the role for government?

 What are the perceptions on the appropriate means of government intervention?

 What are the connections to the political institution?

Type of political institutions

Inclusive or extractive

 Pluralism

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Chapter 3. Methodology

The applied research strategy to implement the multidimensional framework for analysis is a qualitative research method. The advantage of using a method as such is that it requires us to generate a large database in a prose form with interview transcripts, and field notes (Bryman, 2008: 538). Since the central purpose is to discover the linkage of political institutions to a reregulation project, it is considered necessary to generate a thick description of relationships and patterns. The best possible way to channel the gathered information will be through an inductive approach, in which a propositional generalization alongside a case study will be made. This entails a summary of

interpretations and claims, to which is added the researcher’s personal experience, or ‘naturalistic generalization’ (Creswell, 2014: 65). In this research, the combination of Snyder’s and Acemoglu and Robinson’s theories will guide towards categorization and eventually framing of the reregulation project in the liberalized coffee sector of Ethiopia.

Institutional arrangements in specific cases are best to be researched inductively with historical institutionalism. This approach allows us to ask why certain phenomena take place within a case study, what the outcomes are, and looks to explain, rather than to convince (Steinmo, 2001: 2). Because of the similar objectives of historical

institutionalism and this research’s aim, the explanatory path of the method will form a leading thread throughout the results of the analysis. The next section will provide a clear overview of the case selection and establish a timeframe with the critical junctures. 3.1 Case selection

The most appropriate case for research on reregulation in the coffee sector is one in which it plays a specifically important role for the national economy. Additionally, looking at liberalist institutional framework development requires a case in which the SAP’s were implemented. Using the definition of John Gerring and Lee Cojocaru’s research ‘Case-Selection: A Diversity of Methods and Criteria’ (2015), Ethiopia is considered a typical, representative case. From a total of around 94.1 million inhabitants, approximately 15 million people are directly or indirectly depending on the coffee sector process. The product accounts for almost 25% of the country’s total export earnings

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annually. Ethiopia comes in fifth place of worlds largest exporting coffee country, contributes for 7 to 10% of total worldwide coffee production, and most importantly is the place where coffee originates from (Tefera and Tefera, 2013: 2). Additionally, the country agreed to implement neoliberal market policies when it accepted the SAP terms with the World Bank and IMF in 1992 (Geda, 1999: 6). These policies will be specified in the case background of chapter 5. Additionally, as this research looks at reregulation projects, we will use a case study within the case study of the Ethiopian coffee sector. The Ethiopian Commodity Exchange is a pioneering economic institution in Africa that has recently been implemented in 2008. Sixteen years after liberalization of the coffee sector, this case will serve as an interesting subject in order to investigate the connection between political institutions and a reregulation project.

The leading timeframes for this research are distinguished by two critical junctures for institutional development. Defined by Giovanni Capoccia and Daniel Kelemen (2007), critical junctures in institutional analysis are:

“[…] Characterized by a situation in which the structural (that is, economic, cultural, ideological, organizational) influences on political action are relaxed for a relatively short period, with two main consequences: the range of plausible choices open to powerful political actors expands and the consequences of their decisions for the outcome of interest are potentially much more momentous. Contingency, in other words, becomes paramount.” (Capoccia and Kelemen, 2007: 343).

Accordingly, both parts of the analysis entail different critical junctures. For the political institutions, the deposing of the military Derg regime in 1991 by the Ethiopian People’s Revolutionary Democratic Front (EPRDF) in the Ethiopian government provides the critical juncture. In the reregulation project analysis, the leading critical juncture for the analysis is the implementation of the SAP’s in 1992, after which the consequences of liberalization of the coffee sector would eventually lead to the establishment of the ECX. The preliminary case backgrounds in the analytical chapters will further elaborate on the events prior to and after the critical juncture timeframes.

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3.2 Qualitative data collection and analysis

Due to the division of the analysis into two parts, the use of sources differs slightly for each of them. The type of political institutions called for the use of predominantly secondary sources. Starting with a case background of the political dynamics in Ethiopia before 1991 and from 1991 until today, research articles proved to be the most valuable sources of information. For the analysis, the Ethiopian Constitution serves as the most important primary source. Secondary sources from Freedom House data, Human Rights Watch reports, and research articles helped investigate the degree of pluralism and centralization of the Ethiopian political institutions. The centralization aspect was

investigated effectively by using research conducted by Jan Abbink (2006), Lovise Aalen (2006), and Zheng Yongnian (2009), as well as Ethiopian official state documents.

For the second part of the analysis, the type of reregulation project, fieldwork and interviews are the most meaningful sources of information. Often, theses in the Master’s phase are written behind a desk or in the student library; away from the actual case they try to investigate. This can hardly be called a representative image of a case’s content. Additionally, conducting fieldwork brings aspects to light that would not have been considered otherwise. Especially due to the bureaucratic nature of the Ethiopian political field, it can quite often be a difficult task to research the needs of the country through electronic sources without being physically present (Mengistu and Vogel, 2006). The respondents for the article’s research are from different backgrounds and can therefore provide a broad view upon the shaping of policy frameworks in the Ethiopian coffee sector institutions. Among others professions, the interviewees were for example an agricultural counsellor at the ministry of foreign affairs of the Dutch embassy in Addis Ababa, a smallholder farmer from southern Shakiso, an employee of the Southern Region Farmers Cooperative Federation, an Ethiopian representative for UTZ, a specialist from the Ethiopian Commodity Exchange, and a coffee importer from the Netherlands. The final number of interviewees included eleven people. As a result of the differing

professions within the coffee sector, their contrasting perspectives complemented offered many views on the subject. All interviewees were reached trough a snowball approach and informed about the purpose of this research. The content of the interviews was semi-structured in all cases, which allowed touching upon the general topic without following

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strict question outlines. Instead, it was possible to keep the interview process flexible and let interviewees pursue talking about events and patterns that seemed important to them (Bryman, 2008: 438). Additionally, official Ethiopian documents will be used as primary sources in order to obtain a better view on the ECX as a reregulation project. Mainly proclamations and data from the ECX database provided a good overview.

3.3 Research obstacles

The research obstacles of this research are mostly due to the limited timespan of this research. The short two-week period of fieldwork showed to be substantial, but more respondents could have been reached if the time to conduct interviews was more flexible. To that extent, the research will take full use of the data that has been gathered and make the analysis as complete as possible. Additionally, some might argue that conducting qualitative interviews can lead to a biased view, because the respondents were picked on a personal base. However, as mentioned before, the array of participants worked in very diverse professions. It was attempted to avoid biased views and rather look to find perspectives that could complement one another.

3.4 Ethical considerations

Ethical considerations that could have occurred during this research would have been due to informed consent, in which participants of interviews have to be party to agreements (Bryman, 2008: 467). However, the ethical considerations have been brought down to a minimum during this research. A Dictaphone was used during the interviews in order to record the conversations, but in all cases there would be a conforming check for consent to be recorded. None of the data has been collected without mutual agreement. Also, participants were left free to refuse to answer questions at any point or ask for the

Dictaphone to be switched off when reluctant to give their opinion on tape. Moreover, all participants were informed about the research aim and topics. Beforehand, a clear

overview of the research was posed, after which interviewees knew exactly what to expect. Finally, the anonymity was guaranteed at all time, avoiding the risk of people holding back facts. In this respect, all of the ethical considerations have been taken into account and no issues arose during the investigation.

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Having identified all means for successful analysis of the case study, this thesis will now proceed to the empirical analysis chapters. First, the type of political institution will be identified in the macro level scope of Ethiopian politics. Thereafter, an in depth case analysis of the ECX in the Ethiopian coffee sector will investigate what type of

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Chapter 4. Type of political institutions

In this chapter, the analysis for the type of political institutions will be introduced with a case background. Starting with a brief description of politics before 1991, we will move towards the critical juncture of political change in 1991. Thereafter, we will continue with the analysis for political institutions along with the variables provided by Acemoglu and Robinson. A concluding chapter will provide the assessment of the type of political institutions in Ethiopia and thereby fulfil the first step in the empirical analysis.

4.1 Case background: Ethiopian politics

A most notable political era in Ethiopia was that of emperor Haile Selassie I from 1930 until 1974. Under his reign, the state anticipated to develop a modernized Ethiopia. The power of regional nobility was reduced and an increasingly centralised bureaucratic form of administration was pursued (Vaughan and Tronvoll, 2003: 82). No other political parties were present in the country since they were strictly prohibited (Wondwosen Teshome, 2009: 60). The Ethiopian state was based on a conjunction of many ethnically divided groups, which caused a high degree of instability within its borders. The northern Shoan Amharic people were placed in a dominant position over the non- Amharic

population, owning most of the Southern lands. The majority was forced to work on the land that was once theirs. In the 1950’s, the revolt in Eritrea accelerated discontent among society due to the ending of federalism, which had been introduced in Ethiopia since World War II (Young, 1998: 192). Undermining of the regime was predominantly led by the students of the University of Addis Ababa, who raised awareness between the different ethnic communities for their right of self-determination. Violent conflicts emerged in many of the subordinate communities in various regions, such as Tigray, Eritrea, Ogaden, Bale, Sidamo and Gojjam. Eventually, the Ethiopian army itself rebelled and overthrew the standing regime by Selassie during the 1974 famine (Vaughan and Tronvoll, 2003: 82).

The army forces, or Derg, implemented a Marxist military government led by Mengistu Haile Mariam with the aim of removing the imperial state landlordism pursued by the previous regime. Likewise to Selassie’s reign, the Derg outlawed all other political parties and established a one-party system in which they formed their own political party in 1984: the Workers Party of Ethiopia (WPE). Other opposition parties also flourished

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during the transition period after the Selassie regime, but they were soon persecuted and banned if they threatened the dominant position of the Derg (Wondwosen Teshome, 2009: 61). The Marxist character of the Derg called for a highly centralized position for the WPE and nationalisation of land, which destroyed the material basis of land use. The party did opt the idea for the establishment of a federalist structure for Ethiopia, hoping to end ethnic diversity and conflict. The idea was first contemplated during the Institute of Nationalities in 1980, in which prospects seemed positive, but the initiative was soon neglected and more or less dismissed (Young, 1996: 534). The Tigrayan Peoples

Liberation Front (TPLF) was the only significant opposition force against the regime by 1979 and promoted the right of all nationalities in Ethiopia. With the establishment of many opposition groups and the Derg losing control of the state, negotiations for political change started at a conference organised in London by the United States in 19991 and resulted in the formation of the Ethiopian People’s Revolution Democratic Front

(EPRDF). The group contained a cooperational force by the TPLF, the Eritrean Peoples Liberation Front (EPLF) and the Oromo Liberation Front (OLF). Putting nationality first, the EPRDF returned to Addis Ababa with new president Meles Zenawi to start its two-year transitional period. (Ibid: 536). The coalition of the EPRDF strived to implement market-based structural changes in order to employ a free market economy and proved to be willing so by implementing the liberal market SAP in 1992 (Lefort, 2012: 682). This in contrast to the abolished Derg regime, who wished to nationalise the economy. Additionally, state federalism was realized. The first EPRDF Constitution was set up in 1994 and contained the federal division of the nine Ethiopian federal states. General elections have since been held in 1995, 2000, 2005, 2010 and 2015, in which the EPRDF has always won with a convincing majority of votes. The ‘revolutionary democratic’ spread of power of the government, however, can be disputed. The EPRDF stands firm to political liberalism, while pursuing liberal market objectives, and incorporates mild Leninist-Marxist political centralizing features, with a top-down approach and a resisting position against opposition forces (Melakedingel, 2013; Abbink, 2006).

The general elections in May 2015 again showed a victory for the EPRDF, winning all 546 parliamentary seats. Critics argue, however, that a “tragic demise of the multiparty system” has taken place and the use of anti-terrorism laws as a means to beat

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down opposition has increased (Agence France- Presse, 2015). The following section will present the analysis, in which the EPRDF rule will be used to investigate the type of political institutions in Ethiopia.

4.2 Type of political institutions

Starting at a macro level of analysis gives us the opportunity to take into account the broad political context to determine if it influences the policy making in reregulation projects. As mentioned before in subchapter 2.5, this first part of the analysis regarding the type of political institution takes into account the degree of pluralism and

centralization. Thereafter, a brief summary of the empirical findings will conclude on the type of political institutions.

4.2.1 Pluralism

The conceptual definition of pluralism presented by Shaknazarov (1982) in subchapter 2.5.2 described the importance of diversity and a protected plurality of forces within society with mutual respect, exchange, competition, and conflict (Shaknazarov in: Ali, 2009: 666). Additively, William A. Galston (2002) presents political pluralism as the presence of multiple, independent, sometimes competing, sources within a state and political authority that is not dominant for all circumstances (Galston, 2002: 4).

Summarily, the importance of opposition against government force is the leading aspect of pluralism.

Regarding the pluralist principles in Ethiopia, the government has involved several statements in the Constitution regarding the democratic foundation of the nation. The Ethiopian Constitution from 1995 states to intention to rapidly build a political community: “ […] Founded on the rule of law and capable of ensuring a lasting peace, guaranteeing a democratic order, and advancing our economic and social development” (Proclamation no. 1/1995, 1995: 2). Additionally:

“The Constitution is the supreme law of the land. Any law, customary practice, or a decision of an organ of state or a public official, which contravenes this constitution, shall be of no effect (Proclamation no. 1/1995, 1995: 4).

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The Constitution provides critical standards through which the Constitution has to be implemented in legislation and other aspects, as well as the emphasis that democratic values are to be respected. Placing the Constitution as the supreme law of the land provides for a focus away from government hegemony and the affirmation that anyone, even state officials, are to be subdued to the supreme law principles. However, it is valuable to take into account the practical implementation of these principles and see whether or not the democratic matters are indeed carried out.

As Adem Abebe (2012) points out, the outcome of the 2005 elections meant some major law implementation by the EPRDF. Measures were taken against the principal ‘troika’ democratic entities: opposition political parties, the media, and civil society organisations, disregarding the limits on the law making power of the legislator imposed by human rights and other provisions of the Constitution. For the first time since political reforms in 1991, Ethiopia was regarded ‘not free’ by the freedom house index in 2011 (Abebe, 2012: 3). Not only was most of the illegal harassment of these democratic ‘troika’ entities legalised after the 2005 elections, several laws were quickly implemented concerning the free implementation of opposition policies and programmes. They became increasingly difficult to pass without government agreement. In particular, the laws stripped the Addis Ababa City Administration of its control over financial resources and security appliance (Ibid: 5). Taking into account the Anti-Terrorism Proclamation no. 652/2009, it shows a rather doubtful position of the government on statements made by opposing groups and individuals:

“Whosoever publishes or causes the publications of statement that is likely to be understood by some or all of the members of the public to whom it is published as a direct or indirect encouragement or other inducement to them to the commission or preparation or instigation of an act of terrorism […] is punishable with rigorous imprisonment from 10 to 20 years” (Proclamation no. 652/2009, 2009: 4831).

The rather vague description of the specific content of such publication or statements and the position of government to decide upon such measures are suggested to dismiss critical

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defeated the opposition with a staggering 99.6% of the votes. In May, the month of the elections, many fled the country because of a reaffirmation of the Anti-Terrorism Proclamation and the imprisonment of opposition members of for example the Oromo Liberation Front (OLF) and Ogaden National Liberation Front (ONLF) (Human Rights Watch, 2011). Freedom House acknowledges the fact that organizing in competitive political groupings or political parties of your choice remains one of the main attributes to political pluralism. Regarding Ethiopia, however, Freedom House expresses the fact that opposition forces of the EPRDF find it difficult, if not impossible, to effectively operate. In July 2014, opposition members from the Unity for Democracy and Justice Party (UDJ), the Arena Tigray Party, and the Blue Party were arrested and held without any legislative representation. Additionally, in December 2014, police clamped down on rallies by a coalition of opposition parties a year before the coming general elections and approximately 100 people were arrested. The government, however, claims that the arrests had nothing to do with the 2015 elections. Out of a total of 16 points, political pluralism in Ethiopia scores a 2 on the Freedom Index scale (Freedom House, 2015). After the last elections of May 24th of 2015, the one party system of the EPRDF will remain in its governmental position. Recently, reports were issued on harassment and persecution of the opposing political party. The EPRDF accused the opposition of disrupting the voting procedure and denies all claims (“Ethiopian elections marred by harassment claims”, 2015; Foltyn, 2015).

Regarding these facts, it is safe to say that the amount of pluralism within Ethiopia is low. As opposition actors are denied a critical voice through law implementations and harassment, the EPRDF seems to disregard the democratic principles of the Constitution and pursue a rather unitary position in the political institutional field. Keeping in mind the outcomes along this first variable of the type of Ethiopian political institutions, centralization will provide the second variable in order to illustrate the macro level political context.

4.2.2 Centralization

According to Acemoglu and Robinson, Ethiopia has a relatively long tradition as a centralized state (Acemoglu and Robinson, 2013: 435). It is important to take into account the risk of moving towards absolutism when overdrawing centralization

Reregulating the Ethiopian coffee sector : a multidimensional framework for analysis of the Ethiopian commodity exchange