Governance and Policy Environment for Local Economic Development in Sub-Saharan Africa: Ethiopian Experience

Local Economic Development has gained relative importance as feasible option to traditional top-down development approaches that have generally been unsuccessful in generating significant and sustainable development at the local level. The ability of LED to create economic growth and improve the overall of life the community however relies on the national and local environment where the LED strategy takes place. The aim of the paper therefore, is to systematically examine whether existing decentralization governance framework and national policy environment allows for the successful implementation of LED in Ethiopia. A number of documents like 1995 FDRE constitution, the decentralization governance framework, Sustainable Development and Poverty Reduction Program (SDPRP), Plan for Accelerated Sustained Development to End poverty(PASDEP), Growth and Transformational Plan (GTP) (I & II), Urban Policy, National MSEs Strategy, Regional Development framework and their alignment with LED were critically reviewed. The results of the study revealed that the existing decentralization framework, series of national plans and policies has created opportunities for LED implementation despite the country lack concrete LED framework. But facts on the ground do not suggest that the decentralization governance framework in the country has put the right institutional framework in place for the successful promotion of LED at local level.