IDEAS home Printed from
   My bibliography  Save this paper

The rural-urban transformation in Ethiopia:


  • Dorosh, Paul A.
  • Schmidt, Emily


Although Ethiopia's economy has grown rapidly over the past decade and urbanization is increasing, the country's economic and spatial transformation has only just begun. Ethiopia's share of agriculture in GDP in 2006 (48 percent) was the highest in the world, and more than double the average for low income countries (20 percent). Likewise, Ethiopia remains one of the least urbanized countries in the world (16 percent), compared to the Sub-Sahara Africa average of 30 percent. Nonetheless, massive changes are underway. Agricultural growth accelerated in the second half of the first decade of the 2000s so that real agricultural GDP growth averaged 6.2 percent from 1998/99 to 2007/08. At the same time, Inflows of foreign aid, workers' remittances and private transfers that funded a surge in investment and boom in the construction sector. Measuring urbanization in terms of spatial agglomerations of people in and near cities of 50,000 or more, shows that urbanization growth rates between the population census years 1984 and 2007 are much higher (between 8 and 9 percent) than estimates based on official definitions of urban (4.2 percent). A surge in public investment has also helped bring about a new era for economic development. Road investments, particular those in transportation corridors in the highlands, have greatly increased connectivity, so that the number of people residing in or within three hours of a city of 50,000 or more, rose from 6.24 million in 1984 (15.5 percent of the population) to 38.7 million in 2007 (48.5 percent of the population). Moreover, massive investments in hydro-electric power have revolutionized Ethiopia's economy and opened up the potential for significant increases in productivity and output. Electricity per capita is expected to soon reach a level nearly 9 times the level of the 1960s, though it still remains far below the sub-Saharan Africa average. Similarly, fixed telephone line infrastructure more than doubled from 2003 to 2008; and cell phone subscription catapulted to 3.16 million subscribers in 2008 from only 50,000 in 2003. Finally, improvements in education and health are making significant impacts on the country's wellbeing and productivity. As Ethiopia moves forward, it faces key development policy decisions. Since the late 1990s, the country has followed an Agriculture Development Led Industrialization (ADLI) policy emphasizing investments to increase agricultural productivity and spur growth linkages with the rest of the economy. At the same time, government policy has effectively slowed rural-urban migration through regulations prohibiting sale of land, loss of land rights for those who leave rural areas, and registration requirements for new migrants. Allocation of public investments across sectors and across rural-urban space, together with land policies and various regulations on labor mobility, will be major determinants of the growth path of Ethiopia's economy and the extent of poverty reduction in the coming decade.

Suggested Citation

  • Dorosh, Paul A. & Schmidt, Emily, 2010. "The rural-urban transformation in Ethiopia:," ESSP working papers 13, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:esspwp:13

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Stefan Dercon & Daniel O. Gilligan & John Hoddinott & Tassew Woldehanna, 2009. "The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1007-1021.
    2. Kloos, Helmut, 1990. "Health aspects of resettlement in Ethiopia," Social Science & Medicine, Elsevier, vol. 30(6), pages 643-656, January.
    3. Hazel Bateman, 2007. "Introduction," Chapters,in: Retirement Provision in Scary Markets, chapter 1 Edward Elgar Publishing.
    4. Ayele, Gezahegn & Chamberlin, Jordan & Moorman, Lisa & Wamisho, Kassu & Zhang, Xiaobo, 2009. "Infrastructure and cluster development: A case study of handloom weavers in Ethiopia," ESSP discussion papers 1, International Food Policy Research Institute (IFPRI).
    5. Alejandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc.
    6. Blessing Mberu, 2006. "Internal migration and household living conditions in Ethiopia," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 14(21), pages 509-540, June.
    7. Kiros, Gebre-Egzbiabher & White, Michael J., 2004. "Migration, community context, and child immunization in Ethiopia," Social Science & Medicine, Elsevier, vol. 59(12), pages 2603-2616, December.
    8. Deininger, Klaus & Jin, Songqing, 2006. "Tenure security and land-related investment: Evidence from Ethiopia," European Economic Review, Elsevier, vol. 50(5), pages 1245-1277, July.
    9. Edwards, Alejandra Cox & Ureta, Manuelita, 2003. "International migration, remittances, and schooling: evidence from El Salvador," Journal of Development Economics, Elsevier, vol. 72(2), pages 429-461, December.
    10. Kuznets, Simon, 1973. "Modern Economic Growth: Findings and Reflections," American Economic Review, American Economic Association, vol. 63(3), pages 247-258, June.
    11. Howard, Julie & Crawford, Eric & Kelly, Valerie & Demeke, Mulat & Jeje, Jose Jaime, 2003. "Promoting high-input maize technologies in Africa: the Sasakawa-Global 2000 experience in Ethiopia and Mozambique," Food Policy, Elsevier, vol. 28(4), pages 335-348, August.
    12. World Bank, 2008. "World Development Indicators 2008," World Bank Publications, The World Bank, number 11855, June.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Amsalu Woldie Yalew, 2016. "Economy-wide Effects of Climate Change in Ethiopia," EcoMod2016 9750, EcoMod.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fpr:esspwp:13. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.