Ethnic Federalism, Fiscal reform, Development and Democracy in Ethiopia

Ethiopia has embarked upon what it claims to be a novel experiment in 'ethnic federalism'. The ruling Ethiopian Peoples' Revolutionary Democratic Front has asserted that it is intent on forthrightly addressing the claims of ethnic groups in the country of historic discrimination and inequality, and to build a multi-ethnic democracy. The essay critically assesses this effort, concentrating on the emerging relations between the federal and regional state governments. Particular attention is given to the strategy of revenue sharing as a mechanism for addressing regional inequities. Where appropriate, comparisons are made with the federal system in Nigeria, Africa's most well-known federal system. The article concludes that, while there may be federal features and institutions normally found in democracies, Ethiopia has not constructed a system of democratic federalism. Moreover, rather than empowering citizens at the grassroots level, Ethiopia tightly controls development and politics through regional state governments, with very little popular decision making in the development process.