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296 Diagnosing Corruption in Ethiopia
The nature of land as an asset also implies the scope for significant
externalities. Social, ecological, and aesthetic concerns mean that purely
market-driven land use will be suboptimal. Property rights must thus be
defined with these concerns in mind. Moreover, in practice, externality
concerns are sufficient in many circumstances to necessitate state ownership
of land, such as in the case of environmentally sensitive areas,
national parks, roadways, and other public spaces.
The need for information services creates the scope for another
public good the state can provide: the maintenance of accurate records
and information about land rights and obligations. The transfer of land
and its use as collateral for credit requires that information concerning
the assignment and nature of land rights be available to all interested
parties and the public in general. Because functioning land markets are
important to ensure efficient allocation of resources, reducing associated
transactional costs can have important benefits. In addition, publicly
available information can help to better identify and inform
decisions about externalities.
The Land Sector in Ethiopia
Land in Ethiopia, as in most developing countries, is a critical resource
with a number of economic, social, political, and philosophical dimensions.
Access to land was a key focus of the 1975 revolution that overthrew
the imperial regime, after which the Derg regime nationalized all
rural land and implemented a program to distribute land to the tillers.
Under the federal constitution, all land is owned by the state and not
subject to “sale or other means of exchange.”
Land administration is delegated under the constitution to the regions
(for rural land) and to city governments and municipalities (for urban
land). Federal oversight of land administration is limited. The Ministry of
Agriculture has put in place a framework law to enable the regions to
develop policy and legislation for land administration, but until recently
the ministry had no structure or resources that directly supported the
land administration activities in the regions.
Rural Land
Only five of the nine regions have enacted laws to register rural land
holdings: Amhara; Oromia; Tigray; the Southern Nations, Nationalities
and Peoples Region (SNNPR); and, more recently, Gambella. In Amhara
and Tigray, an Environment Protection, Land Administration and Use