Higher education has been assigned new global importance. It is now the vehicle of choice for nations seeking to increase their competitiveness in an expanding knowledge economy. In developing nations, higher education has also been linked to goals to reduce poverty, under the influence of transnational aid agencies such as the World Bank and its knowledge-driven poverty reduction strategies. Drawing on Amartya Sen’s capability approach to development, this paper argues that this instrumentalization of higher education produces narrow conceptions of development, poverty and knowledge, and an unfounded optimism in ‘knowledge for skills’. The site for this analysis is the development and rapid expansion of Ethiopia’s higher education system, with its antecedents in a centuries-old religious education system but with more recent beginnings in the 1950s and, since the 1990s, under the influence of the World Bank. At stake are opportunity and process freedoms and the deprivation of capability (i.e. poverty) resulting from the constraint of these, evident in the nation’s higher education system. The paper concludes that without concerted efforts to redress injustices and to protect and expand people’s freedom, Ethiopian higher education has little to contribute to national socio-economic transformation agendas.
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