Building New States: Lessons from Eritrea

Göte Hansson

No DP2001-66, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: With the Derg's overthrow in 1991, Eritrea embarked on the construction of a new state. New economic institutions were created, and considerable reform undertaken. Problems in co-ordinating reform and reconstruction were largely avoided, mainly because of the institutional 'clean slate' facing the country at independence and the high level of social solidarity and other social capital that characterize the country. A well-defined economic strategy, and careful use of aid, promised higher returns to investment (and fewer unsustainable projects) than found elsewhere in SSA.

Keywords: Democratization; Economic assistance and foreign aid; Institutional economics; Macroeconomics; Social conflict (search for similar items in EconPapers)
Date: 2001
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