Paradoxes of Inclusion: Adverse Effects of Inclusive Interventions in Northern Ethiopia

Abstract

The involvement of smallholders in various inclusive business models (IBMs) is being widely promoted in Ethiopia. The inclusion, exclusion and distribution effects of IBMs must be better understood, however, in order to make them more impactful. This study, which was carried out in three districts in northern Ethiopia, employed a mixed methods approach. Our results show that inclusion and exclusion are both complex and multidimensional. A focus on transaction costs, productive resource endowments and chain governance is crucial for enhancing smallholders’ inclusion. Our results further indicate that income obtained from participation in IBMs is unequally distributed. The benefits of IBMs vary according to the underlying position of the smallholder. Hence, inclusive development interventions should acknowledge the various positions of smallholders and consider how their positions shape social relations locally. The paper thus reveals the various dimensions, contradictory tendencies, hidden costs and side effects of IBMs.