Assefa Admassie, Principal Research Fellow at the Ethiopian Economic Association

28 June 2016
SERIES Think tanks and transparency

[Editor’s note: On Wednesday June 29th, Tranparify publishes its 2016 report with ratings of the financial transparency of 200 think tanks from around the globe. In the run up to the report, On Think Tanks will feature a number of posts on Think Tanks and Transparency.]

Open Policy Research‘s founder Jaime Gonzalez-Capitel interviews Assefa Admassie, the Executive Director of the Ethiopian Economic Association and Ethiopian Economic Policy Research Institute which has made one of the largest improvements in financial disclosure of any think tank worldwide this year.

Jaime Gonzalez-Capitel: Our readers may not be familiar with the work of EEA. Could you briefly describe your research portfolio?

Assefa Admassie: The Ethiopian Economics Association under its research arm, the Ethiopian Economic Policy Research Institute, undertakes research in four major areas: Macro-economic issues, Agricultural  and Natural Resources Management, Industry and Trade, and Poverty and Social Sectors Analysis.

  • Macro-economic issues. This year we are preparing a report on the Ethiopian economy with a thematic focus on Agricultural transformation. In addition we have other projects related to labor market issues and on revenue generation, for example.
  • Agricultural and Natural Resources Management. A major project is on the future of food and nutrition security globally, in which we are the only African partners of a large consortium and is financed by the EU. Another project supported by Tufts University focuses on the relation between pastoralists and highland agriculturalists.
  • Industry and Trade. In this area we have a big project with SOAS which focuses on the impact of Chinese firms on employment in the sectors of construction and manufacturing.
  • Poverty and the Social Sector. In this area we have a number of projects. One of them is in collaboration with the Carleton University in Canada and deals with fair trade, while another is focused on the demographic dividend in partnership with the Washington-based Population Reference Bureau (PRB), looking at whether Ethiopia’s demographic transition is an opportunity for transformation.

But we’re not exclusively a research organization: we conduct capacity building aimed at different audiences. There are specific trainings for our members, but also short courses for the staff of federal and regional level agencies, for example.

JGC: What is the ratio of core funding versus project based funding the EEA receives?

AA: We have both project based and core funding. As a non-profit, with project-based funding we work on a cost recovery basis. In addition, we also have one or two core funding grants, one from the Think Tank Initiative, which is managed by IDRC (the Canadian International Development Research Center). Until recently, we were beneficiaries of the African Capacity Building Foundation, and we are currently filing an application for another round. I don’t have the numbers in front of me, but in terms of percentage it could be in the range of 60:40, with a majority being project-based funding.

JGC: Do you work closely with the government?

AA: We work with the government at the federal and regional levels when there is a specific need and demand. Right now, for instance, we are working with one of the regional states, and in collaboration with regional universities.

Learn more about Think Tanks and Transparency:

The other support that we provide are several capacity building programs, usually in the form of short term trainings that many organizations and agencies at both the federal and regional level request. Right now I have a request from the National Planning Commission for a training on result-based planning and evaluation, as well as on the use of econometric software. We also organize this kind of training at regional capitals for regional policy actors. So, training is another major engagement with the government.

In terms of research we have had a number of collaborative examples, like a project with the ministry of health that the ministry wanted to do again this year, but we couldn’t take it simply because we didn’t have the capacity.

JGC: Your organization is membership based. How has membership evolved over the last years, and what type of services do members demand?

AA: We currently have between 4,000 and 5,000 members. Typically they are individuals –economists– but we have a range of other categories that include institutional members, honorary members, and students. As you can imagine, the numbers have increased over time. Some of our members are in Addis, many are in the regions, and many are outside Ethiopia. It’s difficult to know who is active and who is not, but we have requests for new memberships every quarter. One of our strong assets is that members are highly passionate. They are willing to help and support our mission, and they are highly engaged in the Ethiopian economic transition.

In terms of services, members can obtain published materials at half price, can take part in trainings at the federal and regional level that are specifically designed for members and are entirely free, as we cover costs including accommodation, meals, etc. We also provide free documentation services in our library, which is open seven days a week and has internet access. Unfortunately, members request more trainings than we can provide and organize with our current capabilities, we simply can’t organize as many trainings as we wish! Moreover, members and other stakeholders are invited to attend the three-day International Conference that we held every year in July, reaching over 1,000 attendants and hundreds of paper presentations.

JGC: Ethiopia ranks 103/168 countries in Transparency International’s Index, yet your organization has opted for full financial disclosure. Why?

AA: While I can’t comment on the global picture and Ethiopia’s position as I don’t know the parameters, EEA strongly believes that it should have prudent financial management systems. We have an external audit every 6 months, not just annually. So every December and every June we make sure the rest of the world can know we’re not hiding anything. The external auditors present their findings in a General Assembly, and this enhances credibility, improves trust and confidence. It really helps us in building confidence with our members and stakeholders – we believe that we are and have to be accountable to our members, who should know our financial portfolio. This is a matter of principle that we have followed since the creation of the think tank. We have nothing to hide, and in fact we haven’t withheld any information even in the past. When we saw the ranking last year we were a bit pissed off –we had everything, but we just didn’t have it on the website.+

JGC: How are the general assemblies, is there a lot of interaction between the organization’s board and staff and its members?

AA: Well, yes, as I said at the General Assembly the auditors present their findings and there is a very dynamic exchange: members raise questions, like for example, why do we have high liquidity, why this expenditure or that, etc. And it’s very important that the audit report has to be approved by the general assembly.

JGC: Do you think these assemblies are particularly dynamic because your member base is highly educated in economic issues?

AA:Yes, I think that is exactly the case. But we don’t have only academics with a background in economics. There are a lot of non-economists, including associate members, finance people, managers, etc. As I said, the members that show up at the General Assembly tend to be passionate about Ethiopian economics and the organization’s mission.

JGC: How does the decision of embracing financial transparency relate to the management of EEA since its foundation? And how does it relate to the credibility of the institution and the influence on policymakers?

AA: To be honest we didn’t know much about Transparify until last year. I got an email from the executive board about the initiative and saw that we had obtained the rating of 1 star – that was the starting point. When I looked into the criteria we decided to post whatever information we had. This helps build our credibility and communicate that transparency and openness are core values for our organization. We think that this is a positive development. We are even thinking to communicate and share the recognition. It can become a positive trademark and further enhance our relation with partners, the government, and our other stakeholders. I believe it will have a positive spillover.

JGC: What have been the challenges in the process, and are there any disadvantages?

AA: I don’t see any risks. We are obliged by our core values to be transparent, and I don’t think that there are any negative implications – this is of course yet to be seen in the future, but any rational person and organization would take this positively. You know, think tanks are not always clean. If you take my own country, there are serious debates within the government and between the government and civil society organizations. The government has suspicions about the role of these organizations and who backs them, but by disclosing and making ourselves transparent we will hopefully clear some of the doubts. I want to underline again that the only thing that is new to us is publishing on the website the information that we already had on hard copy.

JGC: How do donors see this movement towards full disclosure?

AA: I think there’s a positive spillover with donors. One of the challenges for them arises from the fact that they’re not sure whether to put their money in that or this pocket, because often it’s not clear how money is being used. A good illustration is what we have done with donors, particularly with bilateral donors, while we were building our multipurpose building complex. Usually donors allow their funds to be used to cover rent, but not for building an organisation’s new offices. In order to assure them that we were doing the right thing, we had quarterly meetings with them to show them how we were only drawing funds from other sources.

Transparify’s award is a positive development that will encourage them to support those who are clean and conduct business prudently.

JGC: You direct an economic think tank with a very strong academic focus. Are you open to corporate funding as well? And if so, how do you think that would impact your activities and your reputation?

AA: The private sector is one of our stakeholders, and I am also a member of the steering committee of the private sector development hub. The good relations we have with the Ethiopian Chamber of Commerce and private companies are based in a basic principle: we don’t want their money to buy our results. We are professional researchers and experts and will not compromise our integrity. As long as private actors are willing to accept any result for a project, we can take their funds, but we remain independent in setting our agenda.

JGC: In some Southern European countries, financial transparency is sometimes considered unrealistic by managers because they fear that their scarce resources may be perceived as a weakness. However, in your last report you very clearly underline your financial struggles and your problems with the renewal of the license. How were the conversations leading to the decision to publish that information?

AA: I would like to start with a clarification: the renewal of the license is not related to financial management, but to our registration format. This organization has been transparent to everyone right from the beginning, from day one. We strongly believe that we are accountable to our stakeholders, to donors (incidentally, we don’t call them donors but partners), to the government, to our members. We believe they should feel comfortable that their money is used for good causes, and in order to generate a strong confidence on EEA, management becomes a critical ingredient: confidence building does not come overnight. It has been a journey, and now the confidence is very high. That depends primarily on how you start doing business from the beginning – you should never try to hide, but be dynamic, have good visions and attract other actors down the line.

Regarding the license, there were a lot of conversations. The first thing that we did was to seek clarification from the licensing agency. That was followed by several rounds of discussion with them. The board has been meeting every week during this crisis, there has been a lot of engagement with government officials, members, international organizations, with many actors! What we haven’t done is go to the media, we thought it probably wasn’t the best move and it was preferable to tackle the issue through the discussions and the negotiations, which are still ongoing.

JGC: What do you recommend to other think tanks in Ethiopia and Africa?

AA: My recommendation is that organizations that want to be credible and faithful to their cause, they need to be transparent. Transparency is one of the elements, one of the variables in the equation. In order to build a trust among stakeholders, to create a proper and credible institutional image, think tanks should take transparency and accountability very seriously.