
Contents
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1. Introduction 1. Introduction
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2. Investment, the Developmental State, and Political Unrest 2. Investment, the Developmental State, and Political Unrest
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3. Division of Powers and Functions 3. Division of Powers and Functions
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3.1 A Centralized Approach? 3.1 A Centralized Approach?
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3.2 State Powers in Investment 3.2 State Powers in Investment
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3.2.1 Investment promotion 3.2.1 Investment promotion
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3.2.2 Natural resource management 3.2.2 Natural resource management
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3.2.3 Agriculture 3.2.3 Agriculture
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3.2.4 Regional investment 3.2.4 Regional investment
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3.2.5 Environmental regulation 3.2.5 Environmental regulation
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4. Investment and Federal‒State Relations 4. Investment and Federal‒State Relations
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5. Investment and Fiscal Policy 5. Investment and Fiscal Policy
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5.1 Taxing Investment 5.1 Taxing Investment
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5.2 Revenue-Sharing Formula 5.2 Revenue-Sharing Formula
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5.3 Administration of Concurrent Taxes 5.3 Administration of Concurrent Taxes
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6. Conclusion and Recommendations 6. Conclusion and Recommendations
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Bibliography Bibliography
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12 Determining the Jurisdiction of Regional States in Promoting Investment in Ethiopia: A Constitutional and Practical Inventory
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Published:November 2022
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Abstract
In Ethiopia, the division of power envisaged in the Constitution, along with the overemphasized right to self-determination, in theory allows states to determine their own socio-economic and development policies. However, these seemingly broad constitutional powers stand in contradiction with the country’s hitherto centralized ‘federal practice’. The problem relates not only to the decision-making process but to the lack of clarity about state jurisdictions. Although the Constitution refers to investment, it gives little further detail about it, even though investment decisions—in prioritizing sectors, in administration, environmental regulation, and revenue generation, as well as in setting fiscal benefits and federal spending—affect the interests of regional governments in one way or the other. Moreover, federal foreign investment policies and strategies cannot be translated into reality unless states allocate land to investors and ensure local security. This chapter juxtaposes Ethiopia’s constitutional provisions with its practice in order to ascertain state jurisdictions in regard to investment promotion, natural resource management, and agricultural investment. The argument is that while the division of power between the centre and the states is a constitutional principle that entails constraining central authority and respecting the autonomy of constituent units, the lack of transparency and accountability, usurpation of states’ power by the centre, and weakness of the rule of law, point to an absence of constitutionalism in the field of the economy and investment, a situation that legitimately calls for political reform.
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