Multinational Federalism, Fiscal Relations and Development in Ethiopia

Abstract

In this paper, I explore the tensions between multinational federalism and the developmental state in Ethiopia and draw attention on the fiscal and economic dimensions of multinational federalism. In the first section, I explain that the purpose of multinational federalism is to protect minority nations from aggressive, assimilationist and centralizing forms of majoritarian nation-building. As such, multinational federalism only makes sense within a certain context, often associated with Western states containing a clear national majority attempting to assimilate minorities. I explain why authors have argued, albeit within some reservations, that this context obtains in the case of Ethiopia. In the second section, I discuss the fiscal and economic dimensions of minority nationalism accommodation in Western states. In the third section, I explore the contextual differences between Ethiopia and Western plurinational states and explain their relevance for assessing the tension between federalism and development in Ethiopia. I argue that although minority nations in the West rarely enjoy full fiscal autonomy, the prospect for fiscal decentralization in Ethiopia is even more limited and this is not entirely unjustified from a contextualist point of view paying attention to feasibility constraints.