Date of Award


Degree Type


University or Center

Clark Atlanta University(CAU)


School of International Affairs and Development


International Affairs and Development

First Advisor

Dr. Ciyata Dinah Coleman

Second Advisor

Mustafah Dhada

Third Advisor

Christopher Jespersen


This study examined the contribution of foreign direct investment to economic development in Ethiopia and Tanzania from 1986 to 1996. Data for this study were obtained from the Ethiopian Investment Authority in Addis Ababa, Ethiopia, and the Tanzanian Investment Promotion Centre in Dar es Salaam, Tanzania. Other publications including the World Bank, the International Monetary Fund, and the United Nations Human Development Programme were also consulted. Using exploratory research method, this undertaking compared and contrasted foreign investment flows and the conditions under which the transfer of capital and technology help achieve the development objectives of the two countries. It also analyzed the investment policies and the role ofthe state in the transformation of the economies of Ethiopia and Tanzania. The results of the study suggest that the expectation that foreign technology and capital are necessary to transform the economies of Ethiopia and Tanzania is not fully confirmed. Moreover, the results of the study suggest that the investment policies were not reflective of the countries’ unique economic conditions. Additionally, the transformation of these economies from underdevelopment to development may be enhanced by strengthening the capacity of the state to build the human capital stock, provide reliable communication systems, and regulate anti-competitive practices.

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