Better data better decisions

Alemayehu Seyoum Taffesse, Director of the IGC Ethiopia
Alemayehu Seyoum Taffesse, Director of the IGC Ethiopia

International Growth Center (IGC) Ethiopia produces independent research to support economic policy. Its focus areas are industrial development, urbanization, agricultural development, youth employment and state effectiveness. IGC held an event with the theme “Dimension of Structural Transformation in Ethiopia: Reflections from Recent Evidence”. Where five research papers were presented to government officials and public sector leaders as well as other stakeholders. Capital’s Eskedar Kifle caught up with Alemayehu Seyoum Taffesse, who is the Director of the IGC Ethiopia and spoke with him about the trends of doing research and utilizing the findings to make policy decisions in Ethiopia.

Capital: What are the duties of the International Growth Center (IGC)?

Alemayehu Seyoum Taffesse: The International Growth Center aims to link policy makers with high caliber international and local researchers to address relevant policy questions. In short it tries to undergird policy decisions with evidence of the highest quality. It does this by commissioning studies as well as collaborating with government and nongovernment research units to promote and disseminate evidence for policy.

Capital: IGC has organized this event and five academic papers are being presented. Can you tell us a bit about the research?

Alemayehu: The broad theme for today’s workshop is dimensions of structural transformation in Ethiopia with evidence and reflections from recent studies. As you correctly pointed out, there are five papers that are being presented.

First we look at the difficulties job seekers may have in finding employment. The difficulties are specifically related to transport cost and ability to prepare oneself to be attractive to employers, such as CV preparation, interview skills and so on. The key result is that when these difficulties are solved; transport costs are covered and skills for presentation are provided, a higher employment rate is achieved.

The second study links the remoteness of residence with the choices they make in consumption and ultimately the rate of change that can occur. It basically traces available goods as you move from an urban center and further away to remote places and whether the fact that you have increasingly limited choices with consumer goods will also restrict your investment, your productivity if you are a farmer and your incentive is to increase your productivity.

We also are attempting to look at credit cooperatives and their role in providing finance to farmers and whether the availability of finance improves productivity in rural areas.

We are also conducting a study on condominium projects, which started in Addis Ababa and has expanded to other towns. The research attempts to observe the impact of providing low cost housing to residents in improving their wellbeing, measured by a variety of indicators. I think this is very relevant because this is a major investment on the part of the government and we are seeing evidence that it is working.

Finally, we are collecting data on labor markets and focusing on self employment and how these are linked to macroeconomics outcomes. This again is an important policy question; as we know millions of job seekers are entering the labor market every year and providing employment for them will be a key determinant of whether Ethiopia can benefit from the demographic dividend. The fact that we have a bulge in our economically active population because of the reduction in mortality rates and the slowing down of fertility rates means that now this gap has increased the economically active population which can, if it is engaged in productive activities push production, savings and a lot of other benefits. That is what demographic dividend means.

Capital: What is the trend in this country when it comes to policy makers actually making use of available research and studies to make decisions?

Alemayehu: It is much better than before. Two things are happening in my view. The economy is getting more complex such that it is no longer possible to make policy choices on the basis of very limited evidence. Because it is more complex, policy makers and other stakeholders should know more to have an effective ability to make changes.

I think there is also an increasing awareness on the part of policy makers and they are demanding more evidence as inputs to their policy decisions. Because we are still a transitioning economy, a lot needs to be improved.

Capital: How is the research being commissioned?

Alemayehu: There are two ways of commissioning research by IGC. The first one is an international call for proposals. This is announced all over the world, asking researchers to submit proposals. We look into for example what the Ethiopian research agenda is. This agenda has been developed in constitution with policy makers, local and international researchers, private sector operators and other stakeholders.

Once these proposals are submitted, they are evaluated using a number of criteria including relevance to policy questions in Ethiopia, their financial cost and others. Both the local country program team as well as the team in the head office composed of experts will evaluate the proposals. The studies that are presented at this event went through this process.

We also respond to demands. If the government says that there is a policy question that urgently needs an answer, we respond to that.

Capital: Is the government conducting enough research to provide evidence for an accurate policy direction?

Alemayehu: What we can say is that there is a growing capacity to conduct relevant research in government and non-governmental entities. The educational system is expanding we have more graduates at the post graduate level we have more researchers and the educational level within the civil service is growing.

Capital: What are the major challenges for carrying out quality research on policy questions in Ethiopia?

Alemayehu: Good research requires good data and data collection is not easy because we are a poor country, but it is much better than countries that are equally poor. We have a Central Statistics Agency which does a lot of data collection, its quality and coverage needs to improve.

Conducting independent local research is at a very young stage particularly in certain policy domains. It has to be encouraged and get better and part of doing that is having international collaborators into the mix which can help strengthen capacity and improve skills and standards.