By: Teshome Adugna(PhD)

Economic Planning and Development Commission

Development Parardigm and economic

05/03/24 eevelopment 1
1.Introduction
Economic and social development of any country depends on
the level of common understanding on government policy and
strategy.
Common understanding at institutional, local, regional level
speed up the policy and strategy implementation that facilitate
economic growth and development.
The general purpose of this training is to highlight the recent
world development and development paradigm.
It further highlight the population situation, regional economic
development in Oromia.
Finally the training discuss the basic concepts and steps of
planning that is important for trainees to apply in their sectoral
or local planning.
Development Parardigm and economic
05/03/24 eevelopment 2
 Part I

Development Parardigm and economic

05/03/24 eevelopment 3
2. Concepts of economic development
• Economic development refers to the multidimensional process
of the reorganization and reorientation of the entire economic
system to improve life quality (living Standard) of the people.
Economic development must involve three core value
– Sustenance: Provision of basic need
– Self steam: Self respect
– Freedom from servitude: The right to choose
• Sustenance: All people have certain basic needs without
which life would be impossible. These life-sustaining basic
human needs include food, shelter, health, and protection.
When any of these is absent or in critically short supply, a
condition of "absolute underdevelopment" exists.
• A basic function of all economic activity, therefore, is to
provide as many people as possible with the means of
overcoming the helplessness and misery arising from a lack of
food, shelter, health, and protection.
Development Parardigm and economic
05/03/24 eevelopment 4
 Cont.
Self-esteem: A second universal component of the good life is
self-esteem—a sense of worth and self-respect, of not being used
as a tool by others for their own ends. All peoples and societies
seek some basic form of self-esteem, although they may call it
authenticity, identity, dignity, respect, honor, or recognition.
Freedom from servitude: A third and final universal value that
he suggests should constitute the meaning of development is the
concept of human freedom. Freedom here is to be understood in
the sense of emancipation from alienating material conditions of
life and from social servitude to nature, ignorance, other people,
misery, institutions, and dogmatic beliefs. Freedom involves an
expanded range of choices for societies and their members
together with a minimization of external constraints in the pursuit
of some social goal we call development.
Development Parardigm and economic
05/03/24 eevelopment 5
Cont.
Objective of economic development: The followings are the
major objective of economic development
 To increase the availability and widen the distribution of basic life-
sustaining goods such as food, shelter, health, and protection
 To raise levels of living including, in addition to higher incomes, the
provision of more jobs, better education, and greater attention to cultural
and humanistic values, all of which will serve not only to enhance
material well-being but also to generate greater individual and national
self-esteem.
 To expand the range of economic and social choices available to
individuals and nations by freeing them from servitude and dependence
not only in relation to other people and nation-states but also to the
forces of ignorance and human misery

Development Parardigm and economic

05/03/24 eevelopment 6
Cont.
According to Todaro the following are the major
objectives of economic development
Raising peoples’ living levels, i.e. incomes and
consumption, levels of food, medical services, education
through relevant growth processes
Creating conditions conducive to the growth of peoples’
self-esteem through the establishment of social, political
and economic systems and institutions which promote
human dignity and respect
Increasing peoples’ freedom to choose by enlarging the
range of their choice variables, e.g. varieties of goods and
services

Development Parardigm and economic

05/03/24 eevelopment 7
Economic growth and development

Development Parardigm and economic

05/03/24 eevelopment 8
 Development Parardigm and economic
05/03/24 eevelopment 9
 Development Parardigm and economic
05/03/24 eevelopment 10
3. Recent world economic development
• Economic growth accelerated in more than half the world’s
economies in both 2017 and 2018.
• Developed economies expanded at a steady pace of 2.2 per cent in
both years, and growth rates in many countries have risen close to
their potential, while unemployment rates in several developed
economies have dropped to historical lows.
• Among the developing economies, the regions of East and South
Asia remain on a relatively strong growth trajectory, expanding
by 5.8 per cent and 5.6 per cent, respectively in 2018.
• Many commodity exporting countries, notably fuel exporters, are
continuing a gradual recovery, although they remain exposed to
volatile prices.
• While economic prospects at the global level have improved over
the past two years, several large developing countries have seen
per capita income decline.
Development Parardigm and economic
05/03/24 eevelopment 11
Cont.
• Further declines or weak per capita income growth are anticipated in 2019
in Central, Southern and West Africa, Western Asia, and Latin America and
the Caribbean—homes to nearly a quarter of the global population living in
extreme poverty.
• Even where per capita growth is strong, it is often driven by core industrial
regions, leaving peripheral and rural areas behind.
• While unemployment rates are at historical lows in several developed
economies, many individuals, notably those with low incomes, have seen
little or no growth in disposable income for the last decade. (Relationship
between employment, per capital income, income inequality)
• More than half of the world population has no access to social protection,
perpetuating high levels of subsistence activities.
• These imbalances push the targets of eradicating poverty and creating
decent jobs for all further from reach.
• Inadequate income growth also poses risks to many of the other Sustainable
Development Goals, as countries strive to alleviate infrastructure
bottlenecks, improve health, upgrade human capital and broaden
opportunities.

Development Parardigm and economic

05/03/24 eevelopment 12
Cont.
• Many of the developing economies that are falling behind
depend heavily on commodities, both in terms of export
revenue and financing fiscal expenditure.
• The combination of high volatility of export and fiscal
revenues often translates into large swings in economic
activity, and lower rates of growth over the longer term.
• These effects are exacerbated in countries with weak
governance and poor institutional quality, where the lack of
diversification may act as a barrier to socioeconomic
development.
• Among the commodity-dependent growth laggards, many have
also been mired in long-standing armed conflicts or have faced
civil unrest and instability in recent decades.

Development Parardigm and economic

05/03/24 eevelopment 13
Cont.
• Slower growth in China and/or the United States could also reduce
demand for commodities, affecting commodity-exporters from
Africa and Latin America.
• There is a risk that the trade disputes could aggravate financial
fragilities, especially in some emerging economies.
• Rising import prices, coupled with tighter financial conditions and
high debt-servicing costs, could squeeze profits and cause debt
distress in certain industries.
• Along social dimensions, economic growth is often failing to
reach those that need it most.
• Weak per capita income growth in regions where poverty levels
and inequality remain high acts as a severe impediment to
social development.
Development Parardigm and economic
05/03/24 eevelopment 14
Cont.
• Despite substantial progress over the last two decades,
more than 700 million people remain below the extreme
poverty line, of which more than half are in Africa.
• Achieving the target of eradicating poverty by 2030 will
require dramatic shifts in countries where poverty rates
remain high, both in terms of sharp accelerations in
economic growth and steep reductions in income
inequality.
• In Africa, economic growth needs to rise to double-digit
levels to reach poverty reduction targets, well beyond
growth rates recorded over the last 50 years.
Development Parardigm and economic
05/03/24 eevelopment 15
 Development Parardigm and economic
05/03/24 eevelopment 16
 Development Parardigm and economic
05/03/24 eevelopment 17
 Development Parardigm and economic
05/03/24 eevelopment 18
 Development Parardigm and economic
05/03/24 eevelopment 19
Cont.
Economies such as those of the United States, Europe, and
Japan have benefited from many decades of economic growth.
The overall growth of gross domestic product (GDP) in these
countries has increased due to a combination of factors
including;
 growth in aggregate demand and labor productivity,
technological innovation,
investment in manufactured capital.
taking advantage of trade opportunities

Development Parardigm and economic

05/03/24 eevelopment 20
 Figure 1: The Unequal Distribution of the World’s Income.

Development Parardigm and economic

05/03/24 eevelopment 21
Cont.
There are three main factors driving Affric’s decline;
 High initial income inequality
 Relatively higher population growth among developing
countries.
 Lower per capita income growth among developing
countries regions.

Development Parardigm and economic

05/03/24 eevelopment 22
 Development Parardigm and economic
05/03/24 eevelopment 23
 Development Parardigm and economic
05/03/24 eevelopment 24
4. Developments Paradigm
Development paradigm is a completely new way of thinking
that can bring social, economic and political transformation to
improve the well being of the society.
It is a modality or path to follow to achieve development,
based on a codified set of activities and/or based on a vision
regarding the functioning and evolution of a socio-economic
system.
In other words a development paradigm is an economic system
for development that is composed of interactive functions
among markets, governments, and institutions (ADB, 2003).

Development Parardigm and economic

05/03/24 eevelopment 25
Cont.
According to Abonyi Nichodemus Nnaemeka (2009), the basic
assumptions of the development paradigm are as follows:
 Development is not economic growth even though economic growth in
large measure determines its possibility.
 A development paradigm cannot, therefore, be judged merely by its
conduciveness to economic growth although this criterion of judgment
is not irrelevant to its validity.
 Development is not a project but a process.
 Development is the process by which people create and recreate
themselves and their life circumstances to realize higher levels of
civilization in accordance with their own choices and values.
 Development is something that people must do for themselves, although
the help of others can facilitate it. If people are the end of development,
as is the case, they are also necessarily its agents and its means.

Development Parardigm and economic

05/03/24 eevelopment 26
Cont.
Since world war II, their were different categories of
development theories and paradigm:
 Harrod- Domar Economic Growth Theory
 Solow(Neo-classical) Economic Growth Theory
 Rostow’s Sages of Economic growth
 Endogenous Economic Growth
 Modernization Economic Growth
 Structural Growth Theories
 Dependency theory
 Neo-liberal development paradigm
 Developmental state development paradigm

Development Parardigm and economic

05/03/24 eevelopment 27
4.1 Dependency Theory
Dependency Theory developed in the late 1950s under the
guidance of the Director of the United Nations Economic
Commission for Latin America, Raul Prebisch.
Prebisch and his colleagues were troubled by the fact that
economic growth in the advanced industrialized countries did
not necessarily lead to growth in the poorer countries.
The dependency theory defined as
 [Dependency theory is]...an historical condition which shapes a
certain structure of the world economy such that it favors some
countries to the detriment of others and limits the development
possibilities of the subordinate economics...a situation in which
the economy of a certain group of countries is conditioned by the
development and expansion of another economy, to which their
own is subjected.
Development Parardigm and economic
05/03/24 eevelopment 28
 There are three common features to these definitions which most
dependency theorists share.
 First, dependency characterizes the international system as comprised of
two sets of states, variously described as dominant/dependent,
center/periphery or metropolitan/satellite.
 Second, the definitions assume that external forces are of singular
importance to the economic activities within the dependent states. These
external forces include multinational corporations, international
commodity markets, foreign assistance, communications, and any other
means by which the advanced industrialized countries can represent
their economic interests abroad.
 Third, the definitions of dependency all indicate that the relations
between dominant and dependent states are dynamic because the
interactions between the two sets of states tend to not only reinforce but
also intensify the unequal patterns. Moreover, dependency is a very
deepseated historical process, rooted in the internationalization of
capitalism. Development Parardigm and economic
05/03/24 eevelopment 29
 d)

(
y e

U
r

Pe rde
e op

n
h

d
p el

e
i
ir p vel
h e r ev
P rd
Flows of Wealth
e op
r
e
y e

n d
( U
d)

(Developed)
Center

(Underdeveloped)
Periphery
Development Parardigm and economic
05/03/24 eevelopment 30
 WORLD MARKET

CENTER PERIPHERY

SOCIAL EXCLUSION (POVERTY)

Development Parardigm and economic

05/03/24 eevelopment 31
 Structuralism versus Dependency
International Dependence
Structural Change
Emphasis is on international
Emphasis is on traditional
power imbalances and the need
neoclassical theories designed to for fundamental economic,
generate GDP growth political and institutional reforms
Optimistic that the right mix of both domestic and worldwide.
economic policies will generate Pessimistic in that they offer an
beneficial patterns of self- appealing explanation of
sustaining growth underdevelopment but they offer
Underdevelopment is a result of little formal or informal
internal constraints such as explanation of how countries can
insufficient savings and initiate and sustain development.
investment or lack of education Underdevelopment is an
and skills. externally induced phenomenon

Development Parardigm and economic

05/03/24 eevelopment 32
SOLUTION:
BREAK UP THE
BONDS OF
DEPENDENCY

Development Parardigm and economic

05/03/24 eevelopment 33
Criticism of Dependency Theory
The actual economic performance of developing countries that
have pursued revolutionary campaigns of industry
nationalization and state-run production has been mostly
negative.
Dependency theory suggests that countries should become
more inward-looking and less entangled (delinking) with
developed countries, trading only with other developing
countries.
 Countries like India and China that pursued inward looking
policy experienced stagnant growth and eventually opened up
their economies. On the other side, the Four Asian Tigers
emphasized exporting to developed countries and have
prospered.

Development Parardigm and economic

05/03/24 eevelopment 34
4.2 Neo-liberal dev’t paradigm
• Neo-liberalism is the name often given to the political-
economic restructuring or reforms program proposed for
developing countries by developed country economists, the
International Monetary Fund (IMF), and the World Bank
during 1970s.
• The central proposals of neo-liberalism are to permit free
markets to flourish, privatize state-owned enterprises, promote
free trade and expansion, welcome foreign investors from the
North and eliminate government regulations and protectionism.
• The role of the state becomes one of providing only those
goods and services that would not otherwise be provided by the
private sector.

Development Parardigm and economic

05/03/24 eevelopment 35
Cause of neo-liberalism
The counter-revolution claimed that limited development was
the result of three main causes:
an over-extended government and public sector apparatus
associated with corruption and inefficiency
a proliferation of state-sponsored distorting economic
controls which inhibited the market
the existence of ‘traditional’ non-market social relations
which prevented the commodification of production
(making a profit out of producing something)

Development Parardigm and economic

05/03/24 eevelopment 36
4.3 Developmental state dev’t paradigm
• Developmental state is the one that determined to influence the
direction and pace of economic development by directly
intervening in the development process, rather than relying on
the uncoordinated influence of market forces to allocate
economic resources.
• Developmental state is one that demonstrates a determination
and ability to stimulate, direct, shape and cooperate with the
domestic private sector and arrange or supervise mutually
acceptable deals with foreign interests‘.
• Thus, a developmental state is broadly understood as one that
evinces a clear commitment to a national development agenda,
that has solid capacity and reach, and that seeks to provide
growth as well as poverty reduction and the provision of public
services.

Development Parardigm and economic

05/03/24 eevelopment 37
Characteristics of Developmental state
A developmental state is characterized by having strong state
intervention, as well as extensive regulation and planning.
The other characteristics include:
 emphasis on market share over profit;
 economic nationalism;
 protection of fledging domestic industries;
 focus on foreign technology transfer;
 large government bureaucracy;
 alliance between the state, labour and industry called
corporatism; (vii) scepticism of neo-liberalism and the
Washington Consensus;
 prioritisation of economic growth over political reform; (ix)
legitimacy and performance;
 emphasis on technical education.
Development Parardigm and economic
05/03/24 eevelopment 38
 Part II

Development Parardigm and economic

05/03/24 eevelopment 39
1. Introduction
• The living standard or welfare of any nation would be depend on the
economic development and growth realized in their respective state.
• Many of the developing countries in Latin America, Africa and
Asian remain behind the developed countries in economic growth
and development.
• This happened due to lack of infrastructure, education, health
services and higher poverty incidence in the developing countries.
• But after the 1970s some of the Asian countries showed remarkable
economic growth that enabled them to reduce the incidence of
poverty to 15.9 percent in 2008 as compared to 77.1 percent in
1981.
• In Sub-Saharan Africa (SSA), the percentage of poverty incidence
only decreased from 53.7 percent to 44.3 percent (Evan Hillebr,
2008). The external influence and internal instability in these last
four decades is considered a major factor for slow economic
performance and higher poverty in SSA.

Development Parardigm and economic

05/03/24 eevelopment 40
Cont.
It is important to see the natural resources and economic
development in Oromia.
The nature of economic growth and development in the region
can have direct impacts on the life quality of people in the
region.
This helps us to knew the status of the region in terms of its
resource utilization and life quality of the people in nthe
region.
This section or part discuss the natural resources, economic
development and population situation in the region.

Development Parardigm and economic

05/03/24 eevelopment 41
2. Natural Resources in Ormia
Natural resources play the major role for economic
development of the given region.
In this party I will try to observe the following resources based
in the region
Land size and utilization
Mineral resources
Water resources
Climate
Forest resources
Livestock
Other resources

Development Parardigm and economic

05/03/24 eevelopment 42
Cont.
Oromia Land Size
 The total area of the National Regional State of Oromiya varies from
study to study.
 According to recently obtained GIS output its total area is 363,375 km 2,
accounting for about 34.4 percent of the total area of the country
 Oromia land size is above half of the African countries. It also larger
than Germany, Italy, Norway, Finland and Poland
 The Region is administratively classified into 20 zones and 333 districts
(46 towns considered as districts).
 The region land used various purpose.
 The table below show the region not used all land available for the
required level of social and economic development
Development Parardigm and economic
05/03/24 eevelopment 43
Table : Land Use/Land Cover Type By Area And Percentage
No Land Use & Land Cover Type Spatial
Coverage in
Km2 %
1 Intensively Cultivated Land 46980 12.93
2 Moderately Cultivated Land 42401 11.67
3 State Farm 2252 0.62
4 Perennial Crop Cultivated land 11408 3.14
5 Afro-Alpine Heath Vegetation 1271 0.35
6 Dense, Mixed and Disturbed High Forests 29575 8.14
7 Dense & Open Riparian Woodland and Eucalyptus 11517 3.17
8 Bush land 38513 10.60
9 Shrub land 45744 12.59
10 Open, Bushed, Shrubed and Wooded Grassland 123063 33.87
11 Swamps and Marshes 1126 0.31
12 Salt flats, Exposed Rock & Sand Surface 6866 1.89
13 Water Body 2652 0.73
14 Urban or Built-up land 7 0.002
15 Total Development Parardigm and economic
363,375 100.0
05/03/24 eevelopment 1
44
Cont.
Mineral Resources
The economic and social development of many countries
depends on the availability and proper utilization of mineral
resources
Oromia region has various types of mineral resources such
as Coal and Iron, metallic , non metallic and precious
metals
The availability of mineral resources contribute for higher
foreign earning and employment opportunities.
In addition to these it improve the life quality of the people
by increasing their income.
A number of African country economy transformed by
using the mineral resources for Example Botswana
Development Parardigm and economic
05/03/24 eevelopment 45
 Table : Mineral Deposits of Oromiya
Mineral Groups Minerals Zones.
Coal and Iron Iron W.Wellega & Bale
Coal E.Wellega.N.Shewa, E.Shewa, W.Hararge

recious metals Gold W.Wellega, Kelem Wellega, Bale, Borena, Guji, Ilu Aba Bora
Gold & Tantalum Guji
Platinum West Wellega
Gemstone Bale, Borena, Guji, West Wellega
Metallic and Non Beryllium Guji
metallic Minerals Cobalt E.Harerge, W.Wellega, West Harerge, Kelem Wellega, West
Wellega
Chromium, Nickel Borena, Guji

West Wellega
Copper, Zinc, Lead E.Harerge, W. Wellega
Clay In almost all zones
Molybdenum West Wellega,
Lead E.Harerge, W.Wellega
Titanium Kelem Wellega
Uranium, Tantalum, talc, soda ash, pumice Borena, Kelem Wellega, W.Wellega, E.Harerge, W.Harerge, Guji,
diatomite,bentonite, zeolite Borena, East Shewa, Arsi

Mica, Graphite Borena, Harerge

Phosphate Bale, W.Wellega
Limestone Bale, N.Shewa, W.Shewa
Gypsum East, West & N. Shewa
Kaolin, quartz, feldspar Guji, E. Harerge
Dolomite W. Harerge
Sodium chloride Borena
Development Parardigm and economic
05/03/24 eevelopment 46
Cont.
Climate: Agro-climatically, Oromiya Regional State is
characterized by Semi-Desert/Bereha/Ho’aa, Tropical/Kolla/
Gamoojjii, Sub-Tropical/Woinadega/Badda Daree, Temperate/
Dega/Baddaa and Alpine (Cool)/ Wurch/ Dhaamotaa zones.
Small variations may appear in the spatial coverage of the
agro-climatic zones from study to study.
The climatic types of the National Regional State of Oromiya
may be grouped into three, with their respective sub-divisions.
They are
 dry climate (the hot arid and hot semi-arid climates),
 tropical rainy climate (the tropical humid and tropical per humid
climates) and
 temperate rainy climate (the warm temperate humid, the warm
temperate per humid and the cool highland climates).
Development Parardigm and economic
05/03/24 eevelopment 47
Table : Agro-climatic zones of Oromiya
Altitude (m) Spatial Coverage Local Name Global Name

Area(km2) %

Above 3500 Dhaamotaa/Wurch Alpine (Cool)

1454 0.4
2500-3500 Baddaa/Dega Temperate
26526 7.3
1500-2500 Badda Daree/Woinadega Sub-tropical
151164 41.6
500-1500 Gamoojjii/Kolla Tropical
180598 49.7
Below 500 Ho’aa/Bereha Desert
3633 1.0
Total 363,375 100.0

Development Parardigm and economic

05/03/24 eevelopment 48
Cont.
Water resources in Oromia
The region has all formes of water resources such as grown
and surface water.
Most of the water basin in the country found in Oromia.
The Region has 7 major river basins, basins, about 68
major rivers and 688 tributaries that drain into the
Indian Ocean, Blue Nile and Inland drainage
systems/lakes in the Region.
The Region has 12 major lakes, of which some of them
are currently used for small scale fish production.

Development Parardigm and economic

05/03/24 eevelopment 49
 Table : Water Basin in Oromia National Regional State

Catchment
Basin Km2 %

Nile/Abay/ Basin 56976 15.7

Baro Basin 26788 7.4
Gibe /Omo/ Basin 24473 6.7
Awash Basin 28771 7.9
Wabi Shebele Basin 77067 21.2
Genale basin 115044 31.7
Rift Valley Basin 16145 4.4
05/03/24
Development Parardigm and economic
eevelopment 363375 100.0
50
 TABLE : MAJOR LAKES OF OROMIYA REGION
Length (km) Width (km) Area (km2) Average depth (m) Altitude (m)
Name Location

Rift Lakes
Ziway (Dembel) 25 20 434 4 1600 E.Shewa
Shala 28 12 400 250 1567 E.Shewa
Langano 18 16 230 46 1585 E.Shewa
Abijata 17 15 205 14 1573 E.Shewa
Abaya 60 20 1160 13 1169 N.W.Borena
Beseka - - 23 85 1542 E.Shewa
Creator Lakes
Chukala - - 1 - 2989 E.Shewa
Hora (Kilole) 1.1 1850 E.Shewa
Bishoftu (Babogeya) 1.5 1850 E.Shewa
Hora Oda(Arsede) 1.1 E.Shewa
Wenchi 8.9 2889 W.Shewa
Dendi 15.0 2840 W.Shewa
Bishoftu 18.0 1850 E.Shewa
Basin Lakes
Adele 1800 E.Harerge
Haromaya 1800 E.Harerge
Cheleleka 2.5 1850 E.Shewa

Man-made Lakes
Fincha’a 31 10 300 - 2000 Horo Guduru
Koka 20 15 250 9 1589 E.Shewa
Development Parardigm and economic
Melka Wakena
05/03/24 - eevelopment- 81.6 - 1850 Bale 51
Cont.
In general there are a number of unique feature of Oromia that
contribute for economic development
 Endowment of natural resource,
 good climatic condition and fertile land, soil, and ample
investment opportunities,
 ƒ The Region has large energy potential endowment
 Proximity to Bole International Airport ƒ
 Availability of human capital and modern infrastructure .
 Strategic location of the region to international organization
in the country, ƒ
 Riche Historical and cultural resources
 Availability of huge competitive market
Development Parardigm and economic
05/03/24 eevelopment 52
3. Oromia population trends and structure
The number of population in Oromia increased from 18
million in 1994 to 38 million 2018.(35.1% of the country’s
total population).
The Oromo represent the majority ethnic group in
Oromiya (85%), and in the country at large.
The region population increased by 2.8 percent annually
The urban population in the region increased 1.7 million in
1994 to 4.9 million in 2015 with the annual growth rate of 4.5
percent
In the same way the rural population increased from 16 million
to 29 million with annual growth rate of 2.6 percent.

Development Parardigm and economic

05/03/24 eevelopment 53
 Development Parardigm and economic
05/03/24 eevelopment 54
 Development Parardigm and economic
05/03/24 eevelopment 55
Cont.
Though the growth rate declines gradually, the population
is expected to increase from the current total population
35.8 million to 38. 9 million in 2020 in the region
 The tendency for population growth to continue beyond
the time that replacement-level fertility has been achieved
because of a relatively high concentration of people in the
childbearing years.
 For example, the absolute numbers of people in
developing countries will continue to increase over the
next several decades even as the rates of population
growth will decline.
Development Parardigm and economic
05/03/24 eevelopment 56
 Development Parardigm and economic
05/03/24 eevelopment 57
 Oromia Population Structure
In addition to the size of population, characteristics of
population play a major role in understanding the impact of
population for national economic development.
Population characteristics refer to many things depending on
the particular population under consideration. These include
distribution of population, age and sex composition, race and
ethnicity, place of residence, marital status and level of
education.
In this part, you will see the characteristics of Oromia
population in term of population distribution, sex composition
and age structure.
Oromia population concentrated more in highland and rural
areas.
Development Parardigm and economic
05/03/24 eevelopment 58
Cont.
Level of urbanization refers to the proportion of country’s
or region’s population living in urban areas as a
percentage of the national total or regional total
population at a given specific time.
Level of urbanization in the Oromia Region was 10.5
percent in1994 and 12.4 percent in 2007.
Urban centers of Oromia National Regional State have a
population size of less than 5000, while about 31.3% of the
total urban centers have a population size of 5000 to
10,000.

Development Parardigm and economic

05/03/24 eevelopment 59
 Development Parardigm and economic
05/03/24 eevelopment 60
 Development Parardigm and economic
05/03/24 eevelopment 61
Cont.
Zonal distribtion of the region indicate that around three
region has more than 3 million population. This region are
jimma,arsi and east harerege,
Other zone such as Zone around fifine, horo guduru and
Kellem Wellega has less number of population which is less
than a million.
The varation of population distribution in the region affected
the density of the region. The higher densily populated zone
are East showa, south west showa.west arsi and finfine special
zone which has more than 200 people per square KM
The less densely populated zone are Borena, Bale and Guji
with the population density of less than 50 per square KM.

Development Parardigm and economic

05/03/24 eevelopment 62
Population density
An estimated population of 38 million was distributed
over an area of about 363,375km2 of Oromiya National
Regional State.
This gives an average crude population density of about
101 persons per km2. However, there is great variation from
zone to zone.
 It ranges from 10 persons per square kilometer in Borena
to 230 persons per square kilometer in East Showa.
 In general, about 87% of the total population of the
region resides in rural area while the remaining 13% of the
total population lives in urban area.
Development Parardigm and economic
05/03/24 eevelopment 63
 Development Parardigm and economic
05/03/24 eevelopment 64
 Development Parardigm and economic
05/03/24 eevelopment 65
Age and Sex Composition of Oromia Population
Age and sex are important characteristics of the population.
They are very important variables in the study of the
population situation in the country.
Age structure (distribution) refers to the distribution of aged
people in the population.
Age structure is both the determinant and consequence of
population growth.
The Oromia population is characterized by a young age
structure with a medium of not more than 18 year, a feature of
rapidly growing population.
In Oromia in terms of sex ration the number of male and
female more or less are equal that mean 1:1.

Development Parardigm and economic

05/03/24 eevelopment 66
Cont.
In Oromia female population constitute
9,361,297(49.9 %) in 1994 while males constitute
9,371,228 (50%) respectively.
In 2007 the number of females population reached
13,398,927 (49.6 %) of the total population while the
males took 13,595,006(50.4 %).
Regional level average sex ratio in Oromia was 1:1

Development Parardigm and economic

05/03/24 eevelopment 67
 Development Parardigm and economic
05/03/24 eevelopment 68
 Development Parardigm and economic
05/03/24 eevelopment 69
Cont.
The country characterize with higher economic active
population which is around 77.3 percent of the total
population.
In Oromia 12.8 percent of the population is bellow the age of 4
years. Economic active population age between 15-64
constitute 49.2 percent in the region.
About 3 percent of the population of the region is accounted
by 65 year and above
The 2007 census indicate that in Oromia that total fertility rate
is 4.8

Development Parardigm and economic

05/03/24 eevelopment 70
Reasons for population growth
 The two demographic factors responsible for this dramatic increase in
size and trend oromia population are:
 The continuous higher birth rate and
 The lower mortality rate.
 The totoal regional fertility rate declined from 6.4 in 2000 to 5.4 in
2016.
 Available data indicate that the total fertility in Oromia higher than the
national fertility rate.
 In the same period the national fertility rate declined from rate 5.9 to
4.6.
The level and trend of fertility depends in an area on a number
of demographic and socioeconomic factors. These are family
planning (contraceptives use and unmet need), marital status,
age at first marriage of women and women age at first sex.
Development Parardigm and economic
05/03/24 eevelopment 71
 Development Parardigm and economic
05/03/24 eevelopment 72
 Development Parardigm and economic
CPR in Oromia compared
05/03/24
to the National (average)
eevelopment 73
Cont.
 The higher decline in mortality and fertility rate contribute for the
growth of population in the region.
 IMR and CMR declined from 116 and 193 in 2000 to 37 and 79 in 2016
respectively.
 In the same way the maternal mortality rate declined from 871per
hundred thousand mother to 420 in the same period.
 such higher decreasing rate of mortality rate as compared to the national
level increase the regional population.
 The provision of health services and other social services development
are the major reason for the decrease in the mortality rate in the region.

Development Parardigm and economic

05/03/24 eevelopment 74
 Development Parardigm and economic
05/03/24 eevelopment 75
 Development Parardigm and economic
05/03/24 eevelopment 76
Opportunities of Oromia Population
The following are the major opportunities of
population
Sources of labor supply which provide the low cost labor
forces that may create competitive advantage for the nation
Higher dividend from the population because the more
people more competition that create new product and
productivities
Higher resources utilization to change the life of the
population

Development Parardigm and economic

05/03/24 eevelopment 77
Implication of Oromia population growth
The following are the major implication of population growth
 Reduce the high growth of per capita income
 Increase unemployment and reduce the higher growth of
employment opportunities
 Diverting fund from research to the provision of basic social
need: Health, education and infrastructure
 Hidden population momentum
 Over utilization of resources
 Higher consumption, lower saving and investment

Development Parardigm and economic

05/03/24 eevelopment 78
 Household Vicious cycle
Higher Public
Saving and of poverty
Feertility
investment
Excess Social
Increase • Excess • Poot
expenditure(s
household size consumptio chool,health, technology
 Less resources n basic • low
available per consumption
• No/ production
capita(land, s)
water,public Reduced • Low
saving  Less capital
goods..) quality of
Production • Less capital investment health
 Challenges
goes to basic accumulati service
in
on and • Low quality
management
investment of
• Intergenera education
tion • Poverty
poverty
Development Parardigm and economic
05/03/24 eevelopment 79
 The way forward
 The following are the way forward to increase demographic dividend in
the Country/Region
 Reducing child mortality, morbidity, and malnutrition rates are
critical precursors to accelerating the fertility decline, as well as the
following policy actions
 Expanding access to comprehensive family planning programs and
addressing social norms on fertility enables families to achieve their
ideal family size.
 Improve access and quality of education for all youth so that they have
the skills and knowledge to work beyond just the manual labor market,
thus increasing the formal labor force.
 Improve the business environment to build the demand for labor and
ease constraints and governance issues.
 Reduce trade barriers and improve market competition
 Encourage female employment outside the home.
 Enhance labor market service theory active and passive labor market
intervention Development Parardigm and economic
05/03/24 eevelopment 80
Discussion points
What is the relationship between population and
emigration in Oromia
How do you evaluate the rural-urban migration in Oromia
 What are the major pull and push factors of rural and
urban migration in the region
What are the possible solution for existed migration in
Oromia

Development Parardigm and economic

05/03/24 eevelopment 81
4. Economic growth and development in Oromia
• Economic Growth
• Economic growth refers to the percentage change in the
national output (Gross Domestic Product) of the given
economic.
• Gross Domestic Product (GDP) refers to the market values of all
good and service produced in the economy.
• In 2002 the annual economic growth of Oromia was 9.7
percent.
• In the same way, after three years, that means in 2005, the
region has achieved 8.5 percent economic growth.
• In 2009, the economic growth recorded in Oromia was 10.4
percent. In 2010 the regional economic growth was 9 percent.
• This economic growth was higher than the average national

05/03/24
economic growth.
Development Parardigm and economic
eevelopment 82
Table 1: Economic and sectoral growth in the year between 2003 and 2009

2003 2004 2005 2006 2007 2008 2009 2010

Agriculture 10.5 9.4 4.5 8.8 7.1 3 6.9 5

Industry 10.8 11.1 21.9 12.5 37.7 13.4 19.7 19.1

Services 7 13.3 11.1 8 11 11 11 12

GDP 9.7 10.8 8.5 8.9 12.3 7.1 10.4 9

Development Parardigm and economic

05/03/24 eevelopment 83
Economic Development in
Oromia
• Economic development refers to the multidimensional process
of the reorganization and reorientation of the entire economic
system.
• Economic development must involve three core value
sustenance, self respect and freedom from servitude.
• Economic development involves something more than
economic growth.
• Economic development include an increase in productivity,
change in Social and economic equalization, mmodern
knowledge, iimproved institutions and attitudes.
• In this part we will see economic development in Oromia in
terms of
• Social development (Education, health and drinking water)
• Infrastructure development
• Poverty reduction
Development Parardigm and economic
05/03/24 eevelopment 84
4.1 Social Development in Oromia
Social Development is referred to as meeting basic human
needs – or provision of basic human needs (such as food,
health, education, water, sanitation & housing) and others
(gender development, child development, youth development,
protection from crime and violence).
Social development also described as the process of organizing
human energies to achieve greater development.
 This study focus on the development of education and
health in the region.

Development Parardigm and economic

05/03/24 eevelopment 85
Cont.
• Education development in Oromia: Education is a
process in which people get knowledge, skill and attitude
which will help them in their day to day life.
• It provides a number of advantages for the country as well
as for individuals.
• For instance, education provides high individual earnings,
more frequent employment opportunity, better health and
nutrition status, Lower fertility rates, greater productivity,
favorable attitude towards educating their children.
• In 1988EC the total number of primary, secondary and
primary student was only 6 million. The number of
student grade 1-12 in Oromia was 6.7 million in 2003EC. In
2009 this number increased to 8.5 million.
• The annual growth rate of student in Oromia was 4.4
percent between 2003 and 2009
Development Parardigm and economic
05/03/24 eevelopment 86
 Development Parardigm and economic
05/03/24 eevelopment 87
Cont.
• In the same way the enrolments of education has shown
significant progress during the last two decades.
• In the 1992 the primary school enrolment in Oromia was
only 45 percent.
• In 2009 the primary school gross enrolment in the region
was higher than 100 percent.
• In the 2009 the total number of schools has increased to
15,323 with more than 10 thousand school construction
between 1995 and 2009.
• Between 1995 and 2009 the annual growth rate of school
construction was increased by 15 percent.
• The expansion of number of school in the region is also
increase at faster rate during the study period
Development Parardigm and economic
05/03/24 eevelopment 88
 Development Parardigm and economic
05/03/24 eevelopment 89
Cont.
• The number of teacher in the primary and secondary schools was
43,267 in 1998. In this year the number of primary and
secondary school teacher s were 39,117 and 4150 respectively.
• The number of primery school teacher takes around 90 percent
of the total teachers in the schools. In 1995 the total number of
both primary, secondary and preparatory has reached to 52,717.
• During the last seven years between 1988 and 1995 the number
of teacher was growing annually by 3.1 percent.
• In 2005 the total number of teachers increased to 131,750.
• During the last two decades the number of primary school
teachers and secondary increased by 26 and 31 percent
respectively.
Development Parardigm and economic
05/03/24 eevelopment 90
 Development Parardigm and economic
05/03/24 eevelopment 91
Cont.
• Health sector development in Oromia: The other component of
social development is the health status of Oromia National State.
• The provision of health service has some direct effect to the
improvement of economic welfare of the society.
• Adequate health service provision can increase the productivity and
yield of human capital. Besides, improving the access of the poor to
health service is important for increasing the poor's income.
• The study analyze the health status of Oromia region based of
selected health indicators (vital indicator and burden of disease),
health service coverage and health facilities.
• Health coverage, infant mortality rate, child mortality rate and
maternal mortality rate used to see the improvement of health status
in the region.
• The number of health center, hospitals and nurses are use as health
services provision during the study period.

Development Parardigm and economic

05/03/24 eevelopment 92
Cont.
The study tries to observe the health status of the
region by analysis the health indicators and coverage.
The maternal mortality rate in the region declined
from 1,250 mother deaths per thousand women in
1990 to 673 mother death per 1,000 women in 2005.
 In 2016 the maternal death was declined to 412 per
thousand women.
During the last two decade the maternal mortality
rate in Oromia decline by more than half that is 67
percent decline in the maternal mortality rate.
Development Parardigm and economic
05/03/24 eevelopment 93
Cont.
• The other health status indicators are the infant and child mortality
rate.
• The infant and child mortality rate in 2000 was 97 and 166 per hundred
children respectively.
• In 2010, both the infant and child mortality rate has shown the declined
trends.
• In this year the infant mortality was declined by 40 percent and the
child mortality rate was declined by 24 percent as compared to 2000.
• This indicates the region achieved experienced fast declined in the
infant mortality as compared to the child mortality rate.
• The recent report indicated that the infant and child mortality rate
further declined to 20 and 55 per hundred children respectively.
• During the last two decades the both the infant and child mortality rate
has declined by 79 and 67 .percent.
• The provision of health extension program and other family level health
provision has reduced the infant, maternal and child mortality rate in
the region.

Development Parardigm and economic

05/03/24 eevelopment 94
 Development Parardigm and economic
05/03/24 eevelopment 95
Cont.
• In 1988 the total number of health center and hospital were 61
and 16 respectively.
• In these years the total number of nurse was only 915. During
the last two decades both the hospital and health center
showed increment by 63 and 1305 respectively.
• In the same period the number of nurse increased from 915 in
1998 to 13,618 in 2009. Within the last two decade the number
of nurse increases by more than 12 thousand.
• The health center increased at faster rate as compared to the
hospital.
• The number of health post also increased from 877 in 1990 to
6797 in 2009.
• During the last twenty year the number of health center
increased more than 5 thousand.
Development Parardigm and economic
05/03/24 eevelopment 96
 Development Parardigm and economic
05/03/24 eevelopment 97
Cont.
• In addition to the provision of health facilities and services the provision of
drinking water plays the major role on the improvements of health status in
the region.
• The water coverage in the region was 48 percent 2002. In this year the
drinking water coverage in the rural and urban area was 44 and 74 percent
respectively.
• In 2007 at the end of the first GTP, the regional water coverage has reached 88
percent (rural 88 percent and urban 93 percent). During the first GTP period
the region managed to increase the dirking water coverage above double.
• Realizing the demand of dirking water and the level of development in the
region, the measurements of the water coverage has been revised in tem of
the amount of drinking water and the distance of the dirking water available
in the region.
• In 2009 the regional water coverage is 59 percent based on the GTP II
measurements of the dirking water provision (Rural 60 percent and urban 51
percent). .

Development Parardigm and economic

05/03/24 eevelopment 98
 Development Parardigm and economic
05/03/24 eevelopment 99
4.2 Infrastructure development in Oromia

• The availability of infrastructure plays the major role on

modernizing the economic activities in the given region.
• The infrastructure includes the road and communication
that facilitate the movements of goods, people and
information.
• During the last two decade the road network in the region
increased at higher rate.
• In 1988, the total road length in the region was only 8,433
Kilo Meter (KM).
• In 1995 the length of the road network increased to 10,704
KM which showed 27 percent growth as compared to 1988.
In 2009 the total road length in the region has riches
49,329KM.
Development Parardigm and economic
05/03/24 eevelopment 100
 Development Parardigm and economic
05/03/24 eevelopment 101
4.3 Poverty reduction in Oromia
• Poverty refers to the inability to get the minimum living
standard. According to the World Bank the incidence of
absolute poverty measured by the amount of income
required to get the minimum living standard.
• In 1996 the percentage of people under absolute poverty
line in Oromia national regional state was 34 percent of
the regional total population.
• In this year the total number of poor people was 6.7
million. At national level the percentage of poor people
was 45.5 percent.
• As compared to the national poverty incidence Oromia
has less percentage of poor people.
Development Parardigm and economic
05/03/24 eevelopment 102
Cont.
• The recent 2016 poverty analysis report revealed that the
percentage of poor people in Oromia national regional
state was 23.9 percent which is higher than 23.5 percent of
the national poverty incidences.
• Between 2011 and 2016 the percentages of poor people in
Oromia and national level has declined by 16 percent and
20 percent respectively.
• According to this recent report, in 2016 the numbers of
poor people were 7.9 million which is a million less than
before five years number of poor people in the region.
• During the last two decades the Oromia national regional
state only managed to decrease the absolute poverty only
by 29.7 percent as compared to 48.3 percent of the
decrease at the national level.
Development Parardigm and economic
05/03/24 eevelopment 103
 Development Parardigm and economic
05/03/24 eevelopment 104
 Part III

Development Parardigm and economic

05/03/24 eevelopment 105
What is planning
In the widest sense Planning is the deliberate direction by
persons in charge of large resources of economic activity
towards chosen end.
Planning is deciding in advance what to do and how to do.
 It is one of the basic managerial functions. Before doing
something, the manager must formulate an idea of how to
work on a particular task.
Thus, planning is closely connected with creativity and
innovation. But the manager/leader would first have to set
objectives, only then will a manager know where he has to go.
Planning is what managers at all levels do. It requires taking
decisions since it involves making a choice from alternative
courses of action.
Planning, thus, involves setting objectives and developing
appropriate courses of action to achieve these objectives.
Development Parardigm and economic
05/03/24 eevelopment 106
Cont.
Accoding to Todaro(1971) development planning as the
conscious effort of a central organization to influence, direct
and in some cases even control changes in the principal
economic variables (such as GDP, consumption, investment,
savings, etc.) of a certain country or region, over the course
of time in accordance with a predetermined set of objectives.
More modern conceptions of planning distinguish efforts
that enhance the market allocation from those that would
substitute for the market mechanism.
Development Planning provides a rational approach for
achieving predetermined objectives.
Planning will be a futile exercise if it is not acted upon or
implemented.

Development Parardigm and economic

05/03/24 eevelopment 107
 There are various types of planning. The major types of
planning are the following
National and Regional planning
Functional and structural planning
Inductive and deductive planning
Strategic and Technical planning
Aggeregragate and Sectoral planning
Sectoral and Multi- sectoral planning
Financial and physical planning
 Macro and sectoral planning
 Long and short term planning

Development Parardigm and economic

05/03/24 eevelopment 108
 Benefits/Importances of Planning
Plan is essentially a set of guesses about the
future, since the assignment of priorities requires
uncertain estimates of likely results, benefits and
costs.
The major benefits of planning are:
provide direction,
reduce the risk of uncertainty,
reduces overlapping and wasteful activities,
 promotes innovative ideas,
facilitates decision making and
establishes standards for controlling,

Development Parardigm and economic

05/03/24 eevelopment 109
 Characteristics of planning

• The planning function of the management has certain special characteristics/features. These
characteristics throw light on its nature and scope. The following are the major characteristics of
planning
– Planning focuses on achieving objectives: Organisations/states are set
up with a general purpose in view. Specific goals are set out in the
plans along with the activities to be undertaken to achieve the goals.
Thus, planning is purposeful. Planning has no meaning unless it
contributes to the achievement of predetermined
state/orrganizational goals.
– Planning is a primary function of management: Planning lays down
the base for other functions of management. All other managerial
functions are performed within the framework of the plans drawn.
Thus, planning precedes other functions. This is also referred to as the
primacy of planning. The various functions of management are
interrelated and equally important. However, planning provides the
basis of all other functions.
– Planning is pervasive: Planning is required at all levels of management
as well as in all departments of the organisation. It is not an exclusive
function of top management nor of any particular department. But the
scope of planning differs at different levels and among different
departments.
Development Parardigm and economic
05/03/24 eevelopment 110
Cont.
• For example, the top management undertakes planning for the
organization as a whole. Middle management does the departmental
planning. At the lowest level, day-to-day operational planning is done
by supervisors.
– Planning is continuous: Plans are prepared for a specific period of
time, may be for a month, a quarter, or a year. At the end of that
period there is need for a new plan to be drawn on the basis of new
requirements and future conditions. Hence, planning is a
continuous process. Continuity of planning is related with the
planning cycle. It means that a plan is framed, it is implemented,
and is followed by another plan, and so on.
– Planning is futuristic: Planning essentially involves looking ahead
and preparing for the future. The purpose of planning is to meet
future events effectively to the best advantage of an organization.
It implies peeping into the future, analyzing it and predicting it.
Planning is, therefore, regarded as a forward looking function
based on forecasting. Through forecasting, future events and
conditions are anticipated and plans are drawn accordingly. Thus,
for example, employment forecasting is the basis on which types of
employment activities provides specific job opportunity in the
given time and location.
Development Parardigm and economic
05/03/24 eevelopment 111
Cont.
 Planning involves decision making: Planning essentially
involves choice from among various alternatives and
activities. If there is only one possible goal or a possible
course of action, there is no need for planning because there
is no choice. The need for planning arises only when
alternatives are available. In actual practice, planning pre
supposes the existence of alternatives. Planning, thus,
involves thorough examination and evaluation of each
alternative and choosing the most appropriate one.
 Planning is a mental exercise: Planning requires application
of the mind involving foresight, intelligent imagination and
sound judgment. It is basically an intellectual activity of
thinking rather than doing, because planning determines the
action to be taken. However, planning requires logical and
systematic thinking rather than guess work or wishful
thinking. In other words, thinking for planning must be
orderly and based on the analysis of facts and forecasts
Development Parardigm and economic
05/03/24 eevelopment 112
The need for planning
Planning is beneficial for both the developed and
underdeveloped countries for the developed countries to
maintain or accelerate growth already achieved and for
underdeveloped countries to overcome poverty and to raise the
standard of living.
Planning is conceived as a problem-solving activity that can
relate knowledge to action in different ways
Unless the underdeveloped countries wake up and follow the
planning, they will be left far behind in the race of economic
well-being.

Development Parardigm and economic

05/03/24 eevelopment 113
Cont.
• The following arguments reveal an urgent need of planning in
underdeveloped and developing countries:
– Reduce poverty and inequalities : The economic vicious circle of poverty
arising due to low income, low savings and high propensity to consume, and
further lower investment and low capital formation, low productivity, low
income and poverty must be broken and it can be done only by planning.
Planning is like a shot in the arm which enables a sick person to overcome his
sickness. Planning alone can create more jobs and remove the wide spread
unemployment and disguised unemployment which is a common feature of
underdeveloped countries. It is the sovereign remedy for raising national and
per capital income, for reducing inequities in income and wealth, for
increasing employment opportunities and for achieving as all round rapid
economic development. It is commonly said that the pendulum has swung too
wide in favor of planning that is cannot swing back against planning.
– Development of Agriculture and Industrial Sector: Planning alone can
transform an agricultural and primary producing economy into a more
balanced economy with heavy, medium and light industries. Agriculture and
industry stimulate production in each other by creating demand for their
products. Development of agriculture is also essential to supply the raw
material to the industrial sector. Economic planning held in designing the
plans of agricultural and industrial sectors of developing economies.
Development Parardigm and economic
05/03/24 eevelopment 114
Cont.
 Development of Infrastructure: Planning alone can help an
underdeveloped economy to build up its infrastructure – irrigation
and power, transport and communication and schools and
hospitals. The establishment of these social economic overheads is
essential for an all-round harmonious and integrated development.
The private enterprise is guided by profit motive and is not
interested in these items of social gain.
 To increase the rate of Economic Development: One of the
principle objectives of the planning in underdeveloped countries is
to increase the rate of economic development. It means planning
increases the rate of capital formation by raising the levels of
income, saving and investment. It is only a central planning
authority which can control banking and other credit institutions
when these are under private enterprise they have a tendency to
crowd in urban areas.
The vast rural areas are completely neglected and thrown to the
wolves, the indigenous money-lender. A planned economy can
revolutionize the economy by providing financial institutions and
by mobilizing savings and investments in the rural areas. Planning
alone can remove the imbalance in foreign trade which is generally
unfavorable to the underdeveloped countries that are the exporters
of primary produce and imports of produced goods.

Development Parardigm and economic

05/03/24 eevelopment 115
Cont.  To improve and Strengthen Market Mechanism: The rationale for
planning arises in such countries to improve and strengthen the market
mechanism. The market mechanism works imperfectly in underdeveloped
countries because of the ignorance and unfamiliarity with it. A large part of
the economy comprises the non-monetized sector. The product, factor,
money and capital markets are not organized properly. The market
mechanism is required to be perfected in underdeveloped countries through
planning.
 Balanced Development of the Economy : In the absence of sufficient
enterprise and initiative, the planning authority is the only institution for
planning balanced development in the economy. For rapid economic
development, underdeveloped countries require the development of the
agricultural and industrial sectors, the establishment of social and economic
overheads, the expansion of the domestic and foreign trade sectors in a
harmonious way. All this requires simultaneous investment in different
sectors which is only possible underdevelopment planning.
 Development of Money and Capital Markets : The expansion of the
domestic and foreign trade requires not only the development of the
agricultural and industrial sectors along with social and economic overheads
but also the existence of financial institutions. Money and Capital market are
underdeveloped countries are primary stage. This factor acts as an obstacle
to the growth of industries and trade. The planning authority which can
control and regulate the domestic and foreign trade in the best interests of
the economy. Development Parardigm and economic
05/03/24 eevelopment 116
The process of planning
• Planning, as we all know is deciding in advance what to do and how to
do. It is a process of decision making. How do we go about making a
plan? Since planning is an activity there are certain logical steps for
every manager to follow.
– Setting Objectives: The first and foremost step is setting
objectives. Every organisation/state/sector must have certain
objectives. Objectives may be set for the entire organisation and
each department or unit within the organisation. Objectives or
goals specify what the organisation wants to achieve. It could
mean an increase in sales by 20% which could be objective of the
entire organisation. How all departments would contribute to the
organisational goals is the plan that is to be drawn up. Objectives
should be stated clearly for all departments, units and employees.
They give direction to all departments. Departments/ units then
need to set their own objectives within the broad framework of the
organisation’s philosophy. Objectives have to percolate down to
each unit and employees at all levels. At the same time, managers
must contribute ideas and participate in the objective setting
process. They must also understand how their actions contribute
to achieving objectives. If the end result is clear it becomes easier
to work towards the goal.
Development Parardigm and economic
05/03/24 eevelopment 117
Cont.
 Developing Premises: Planning is concerned with the future which
is uncertain and every planner is using conjecture about what might
happen in future. Therefore, the manager is required to make certain
assumptions about the future. These assumptions are called
premises. Assumptions are the base material upon which plans are to
be drawn. The base material may be in the form of forecasts, existing
plans or any past information about policies. The premises or
assumptions must be the same for all and there should be total
agreement on them. All managers involved in planning should be
familiar with and use the same assumptions. For example,
forecasting is important in developing premises as it is a technique of
gathering information. Forecasts can be made about the demand for
a particular product, policy change, interest rates, prices of capital
goods, tax rates etc. Accurate forecasts therefore become essential
for successful plans.
Development Parardigm and economic
05/03/24 eevelopment 118
Cont.
Identifying alternative courses of action: Once
objectives are set, assumptions are made. Then the next
step would be to act upon them. There may be many
ways to act and achieve objectives. All the alternative
courses of action should be identified. The course of
action which may be taken could be either routine or
innovative. An innovative course may be adopted by
involving more people and sharing their ideas. If the
project is important, then more alternatives should be
generated and thoroughly discussed amongst the
members of the organisation.
Development Parardigm and economic
05/03/24 eevelopment 119
Cont.
 Evaluating alternative courses: The next step is to weigh the pros
and cons of each alternative. Each course will have many variables
which have to be weighed against each other. The positive and
negative aspects of each proposal need to be evaluated in the light
of the objective to be achieved. In financial plans, for example, the
risk-return trade-off is very common. The more risky the investment,
the higher the returns it is likely to give. To evaluate such proposals
detailed calculations of earnings, earnings per share, interest, taxes,
dividends are made and decisions taken. Accurate forecasts in
conditions of certainty/uncertainty then become vital assumptions
for these proposals. Alternatives are evaluated in the light of their
feasibility and consequences.
 Selecting an alternative: This is the real point of decision making.
The best plan has to be adopted and implemented. The ideal plan, of
course, would be the most feasible, profitable and with least negative
consequences. Most plans may not always be subjected to a
mathematical analysis. In such cases, subjectivity and the manager’s
experience, judgement and at times, intuition play an important part
in selecting the most viable alternative. Sometimes, a combination of
plans may be selected instead of one best course. The manager will
have to apply permutations and combinations and select the best
possible course of action.
Development Parardigm and economic
05/03/24 eevelopment 120
Cont.
 Implementing the plan: This is the step where other
managerial functions also come into the picture. The
step is concerned with putting the plan into action, i.e.,
doing what is required. For example, if there is a plan
to increase production then more labor, more
machinery will be required. This step would also
involve organising for labor and purchase of
machinery.
Follow-up action: To see whether plans are being
implemented and activities are performed according to
schedule is also part of the planning process.
Monitoring the plans is equally important to ensure that
objectives are achieved.
Development Parardigm and economic
05/03/24 eevelopment 121
Assessing the plan
• There are four broad criteria for assessing whether development plans work:
– Effect: Did the development plan have any effect on decision making, actions, or
outcomes? For example, if it was intended to work as an agenda, how many of the
listed actions were taken?
– Net benefit: Was the plan worth making and to whom? For example, if it was
intended to work as strategy, were the gains in efficiency of infrastructure provision
over time sufficient to compensate the costs of making the plan?
– Internal validity (or quality): Did the plan fulfill the logic of how it was intended to
work? For example, if it was intended to work as strategy, did it address
interdependence, indivisibility, irreversibility, and imperfect foresight in appropriate
ways?
– External validity (or quality): Did the outcomes intended or implied in the plan meet
external criteria, such as claims for a just society? For example, if it was intended to
work as a vision, did the vision include equity? Ethical acceptability is a crucial
component of external validity.

Development Parardigm and economic

05/03/24 eevelopment 122
Reasons for the
The major poorforperformances
reason of Planof
poor performances
development planning are:
over-ambitious formulation of targets;
limited success in meeting planned targets;
wide dispersions about target levels;
 failure to modify the impact of market forces; and,
 failure to put development plans into effect;
 institutional and bureaucratic weaknesses (including
inadequate planning resources);
exogenous shocks and political factors

Development Parardigm and economic

05/03/24 eevelopment 123
The way forward
The following are the major ways of forwards
Organize various training to enhance the development planning
knowledge and skill at regional and local level
Conduct detail study about the problems of development planning in the
region
 Develop the regional development planning manual or handbook
Improve the institutional structure at the regional and local level
Design new integrated development plan at regional and local level
Prepare the mechanism to enforces and coordinate the regional
development plan

Development Parardigm and economic


05/03/24 eevelopment 124
 Development Parardigm and economic
05/03/24 eevelopment 125
Concepts

of indicators
Adequate information is important to design the development
plan.
An indicator is a specific, observable and measurable
characteristic that can be used to show changes or progress a
programme is making toward achieving a specific outcome
If there is a problem, an indicator can help you determine what
direction to take to address the issue.
Indicators can be useful as proxies or substitutes for measuring
conditions that are so complex that there is no direct
measurement.
Indicators can help you to measure your progress. There are
two basic types of indicators: output indicators and outcome
indicators.
Development Parardigm and economic
05/03/24 eevelopment 126
Function of indictors
Indicators perform many functions.
They can lead to better decisions and more effective actions
by simplifying,
Clarifying and making aggregated information available to
policy makers.
They can help incorporate physical and social science
knowledge into decision-making, and
They can help measure and calibrate progress toward
sustainable development goals.
They can provide an early warning to prevent economic,
social and environmental setbacks.
They are also useful tools to communicate ideas, thoughts
and values. Development Parardigm and economic
05/03/24 eevelopment 127
Types of indicators
There are commonly two types of indicators: Output and
outcome
Output indicators help you to measure the progress that you
have made in delivering your activities or services. When
developing a project or a service you need to specify how
many of each activity you hope to offer and to how many
clients or users. These are also known as output targets.
Outcome indicators are the things that help you to determine
whether you have made the differences that you hope to make
in the lives of the people that use your services (your
outcomes).
Some outcomes are hard and can be measured in numbers.
Hard outcomes usually have straightforward indicators. Some
outcomes are soft and are more difficult to measure.
Development Parardigm and economic
05/03/24 eevelopment 128
levels of outcome indicator
There are 3 types or levels of outcome indicator:
individual indicators that help you to assess the progress of
individuals you are working with
target or user group indicators that help you to measure the
progress of the group of people you are working with (as in
the example used in this guide)
whole community or population indicators that help you to
measure things for the wider community or population
(such as absence rates from school)

Development Parardigm and economic

05/03/24 eevelopment 129
Characteristics of indicators
However, there are certain characteristics that indicators have
in common:
Indicators are relevant; they show you something about the
system that you need to know.
Indicators are easy to understand, even by people who are
not experts.
Indicators are reliable; you can trust the information that
the indicator is providing.
Indicators are based on accessible data; the information is
available or can be gathered while there is still time to act.

Development Parardigm and economic

05/03/24 eevelopment 130
Characteristics of good
indicators
The following are the major characteristics of good indicators
 Valid: accurate measure of a behavior, practice, task that is
the expected output or outcome of the intervention
Reliable: consistently measurable over time, in the same
way by different observers
Precise: operationally defined in clear terms
Measurable: quantifiable using available tools and methods
Timely: provides a measurement at time intervals relevant
and appropriate in terms of programme goals and activities
Programmatically important: linked to the programme or
to achieving the programme objectives

Development Parardigm and economic

05/03/24 eevelopment 131
Indicators in our plan
Issues of development indictors in Oromia
 What are the major indicators included in your
sectoral plan
 How do you evaluate the characteristics of your
indicators
 Do you have development indicators or growth
indicators
 How do you develop your development indicators
 How frequent you evaluate your indicators

Development Parardigm and economic

05/03/24 eevelopment 132
 A A
O M
A TO U
L O
G A NK Y
T H A
Development Parardigm and economic
05/03/24 eevelopment 133