Empowerment or Disempowerment through Formalization? The Case of Women Entrepreneurs in Food Processing in Northern Ethiopia

Abstract

The purpose of this study is to assess the possible contribution of formalizing small-scale women entrepreneurs’ food processing enterprises in northern Ethiopia to their empowerment or disempowerment. The rationale for evaluating this contribution to (dis)empowerment is to provide updated and policy-relevant knowledge on the issue, including assessing if the critiques of the formalization agenda are still valid or whether the situation may have changed. The main finding suggests that formalization offers limited opportunities for empowering small-scale, resource-poor women entrepreneurs in northern Ethiopia. The contribution of formalization to women's (dis)empowerment varies among the various categories of participants in different ways and forms. Some better-off women entrepreneurs benefitted from formalization in some dimensions; however, this is not the case for most of the women entrepreneurs included in the study. Instead, for the poorer women entrepreneurs, formalization rather led to disempowerment. In conclusion, if formalization in Ethiopia harms or disempowers poor women entrepreneurs rather than benefits them, this paper suggests a need for a major change in policies and practices related to the formalization and women empowerment agenda.