LONG-TERM GROWTH OPPORTUNITIES IN ETHIOPIA
Abstract
The paper attempts to investigate the role of institutions in the long-term growth
performance of Ethiopia. In this study, it is hypothesized that the long-term growth
of the country, apart from traditional factors of production i.e. capital and labor is
largely influenced by institutional factors. To examine this, the study uses a times
series data on important variables for the period 1967/68-2002/03, and employed
Johansen cointegration analysis. The variables used are, institutional quality
indicators, human capital, labor force, capital stock, road network, and rainfall. The
findings of the paper support the above stated hypothesis. Institution and physical
capital are found to be significant in both the long and short run models while
human capital is found important only in the long run.
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