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Chapter 12, "Urbanization and Structural Transformation," describes patterns of urbanization in Ethiopia and government policy to promote development of secondary cities. Official population data indicate rapid urban growth, 4.2 percent per year between 1994 and 2015, far outpacing the overall population growth rate of 2.5 percent. By 2050 urbanization is expected to reach 38 percent with major implications for relative wage rates in rural versus urban areas, infrastructure needs, and public service delivery. Improved road infrastructure is improving connectivity across the country and promoting secondary city development. In addition, recent public investments to promote industrialization and increase manufacturing labor opportunities via newly constructed and planned industrial parks, though small relative to the overall economy, are designed to be a catalyst for future growth. ; PR ; IFPRI4; CRP2; ESSP ; DSGD; PIM ; CGIAR Research Program on Policies, Institutions, and Markets (PIM)

Intro -- Contents -- Notes on Contributors -- List of Figures -- List of Tables -- 1 Overview -- Introduction -- Background on Governance and Structural Transformation-Theoretical and Empirical Overview -- Insights from Economic Theory on the Causal Links Between Governance and Structural Transformation and the State of Governance in Africa -- Overview of Trends and Patterns in Structural Change Worldwide -- Institutions and Structural Transformation -- The Impact of Regulations, Legal Systems and Government Participation in the Economy on Structural Transformation -- Impacts of Resource Dependence on Government Effectiveness -- The Role of Export Promotion Agencies in Supporting Industrialisation -- Industrial and Trade Policies for Structural Transformation -- The Role of Fiscal Incentives in Boosting Productivity -- Trade Policy and Global Value Chain Participation in the Food and Agriculture Sectors -- Trade Policy, Governance and Structural Transformation -- References -- 2 Institutional and Governance Weaknesses and African Transformation -- Introduction -- Concepts of Institutions, Governance and Transformation -- Institutions -- Governance -- Economic Transformation -- The Principal-Agent Problem Model -- Understanding the Principal-Agent Model -- Applying the Principal-Agency Theory to the Institutions-Transformation Nexus -- Empirical Literature Linking Growth with Institutions -- Empirical Literature -- Indicators of Institutions and Governance -- Economic Transformation in Africa -- Why Transformation and What Kind of Transformation? -- What Should Be Done to Ensure Effective Transformation in Africa? (Perspectives) -- Conclusion -- Bibliography -- 3 Sub-Regional Perspectives on Structural Change -- Introduction -- Methodology and Data -- Shapley Decompositions -- Data Sources and Aggregation -- Trends in Economic Structure -- Regions.