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Municipal Infrastructure Delivery in Ethiopia: A bottomless pit or an option to reach the Millennium Development Goals?


  • Jan Werner

    () (Institute of Local Public Finance)

  • David Nguyen-Thanh


The following paper examines the different options to finance local public infrastructure in Ethiopia based on the assumption that the federal government of Ethiopia will not provide any guarantees for local borrowing. Besides a detailed description of the local public finance system and the capital market in Ethiopia, the paper also sets out some international successful practices in municipal infrastructure financing. Based on the observation of the Ethiopian case and the consideration of the international experiences, the paper has two major pillars that very specifically identify actions required for implementation. On the one hand, the paper recommends a number of feasible arrangements to generate a revenue enhancement of the local authorities in the existing intergovernmental framework. On the other hand, the paper suggests a solution - for creditworthy as well as for potentially creditworthy urban local governments (ULG) - to finance their future demand of public infrastructure together with the national finance institutions as well as the international donors.

Suggested Citation

  • Jan Werner & David Nguyen-Thanh, 2007. "Municipal Infrastructure Delivery in Ethiopia: A bottomless pit or an option to reach the Millennium Development Goals?," Working Papers 01-2007, Institute of Local Public Finance.
  • Handle: RePEc:lpf:wpaper:01-2007

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    References listed on IDEAS

    1. Spahn, Paul Bernd, 1995. "Local Taxation: Principles and Scope," MPRA Paper 13111, University Library of Munich, Germany.
    2. Benno Torgler & Jan Werner, 2005. "Tax Morale and Fiscal Autonomy: Evidence from Germany," Working Papers 03-2005, Institute of Local Public Finance.
    3. Jan Werner & Anwar Shah, 2006. "Financing of Education: Some Experiences from ten European Countries," Working Papers 02-2006, Institute of Local Public Finance.
    4. Paul Bernd Spahn & Jan Werner, 2007. "Germany at the Junction Between Solidarity and Subsidiarity," Chapters,in: Fiscal Fragmentation in Decentralized Countries, chapter 4 Edward Elgar Publishing.
    5. Jan Werner & Anwar Shah, 2005. "Equalisation and Local Taxation in Denmark, Norway and Sweden," Working Papers 02-2005, Institute of Local Public Finance.
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    More about this item


    Fiscal Federalism; Grants; Ethiopia; Urban and Rural Economies;

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis


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