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Comparing the social-economic externalities from perspective of private and public industrial parks: Case study of Eastern Industrial Park and Bole Lemi Industrial Park, Ethiopia

Year: 2025

Type: article

Abstract: This study examines the socio-economic externalities of two representative industrial parks(IPs) in Ethiopia: the privately-owned Eastern Industrial Park (EIP) and the state-owned Bole Lemi Industrial Park (BLI),especially on their distinct social and economic impacts. This study adopts a qualitative research method based on the results of semi-structured interviews with 17 key informants, including park managers and entrepreneurs, officials from government departments related to IPs, and data from relevant government work reports, KIs, and internet sources. Both IPs have significantly contributed to urbanization, spurred the growth of local economic sectors, facilitated labor shifts from agriculture to non-agricultural activities, and attracted regional labor migration. However, they have also exacerbated land speculation, displacement, and unequal economic relations with local communities. EIP outperforms BLI in fostering forward linkages, investing in infrastructure, and engaging with local governance, partially validating Ethiopia's place-based industrial park strategy. Nonetheless, weaknesses in stakeholder collaboration and integration with urban planning have amplified negative externalities. While EIP employs informal negotiation mechanisms to address institutional gaps, this flexible approach remains an imperfect substitute for formal governance structures. The study highlights the need for enhanced mechanisms to strengthen stakeholder collaboration, align IPs with urban development strategies, and mitigate socio-economic inequalities arising from their operations. These findings provide critical insights for improving Ethiopia's industrial park model and offer lessons for similar initiatives in developing economies. 1. This study compares the socio-economic externalities of the private Eastern Industrial Park (EIP) and state-owned Bole Lemi Industrial Park (BLI) in Ethiopia, highlighting their different impacts. 2. EIP excels in creating stronger lorward linkages and local industrial integration compared to BLI. 3. Both industrial parks have fueled land speculation and social inequality, leading to displacement and exclusion. 4. EIP's informal negotiation model is more effective in addressing social inequalities than BLI's bureaucratic approach.

Source: Journal of Urban Management

DOI: 10.1016/j.jum.2025.03.008

Authors: Han Gao, Xingping Wang

Institution: Southeast University

Language: English

Topic: Economic Zones and Regional Development

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth, Sustainable cities and communities, No poverty, Reduced inequalities

Open Access status: gold

Estimated APC paid: $1,200