Development Economics

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An analysis of Government Budget in Ethiopia:With Particular Reference to Government Expenditure 1958-1977(E.C.)
(A.A.U, 1990-06) Mesghena, Ghirmai; V, Suranyi (dr)
Among the factors that enable to promote development include a well preformed development plan generating and mobilizing resources proper allocation of these resources, particuarly the allocution of financial resources among investment(capital) and consummation ( recurrent), and an efficient utilization of the meager resources that can be mobilized from external and domoestic sources. In Ethiopia,a tremendous growth in budgetary expenditure has been observed at the same time, this increase in goverrunent expenditure has been going to the recurrent and from it a greater proportion to the non-productive sectors , such as defence and to sustain and run the state machinery. This has been accompenied by a large deficit in the budget of the goverrunent. The objective of this study is to find out the factors that are consideed to be responsible to bring about the tremendous grouth in Government. expenditure and also to assess reasons for the allocation of Government fund among alternative proforemanse To meet this end , stepwise regression analysis is employed. This is further reported by additional analysis of factors like insti titutionsons and procedures in expenditure allocation As the case is in the highly developed and least developed countries , Goverrunent expenditure in Ethiopia also was affected more by non-economic factors. however, different components of expenture behaved differently. Finally various suggestions are forwarded to mitigate the existing mitigate proble. even though recommendations to increase revenue by tax are to be suported, particular consideration should be made on the role of the Government in promoting; socio-economic development and the allocation of expenoiture among alternative programs. The Government can not: continue depending; on foreign sources and defiicitfinancing as the major and permanent sources of financing its expenditure with out causingf'.sover consequences to the over all development of the country
Analyzing the Impacts of Petroleum Consumption on Economic Growth in Ethiopia
(AAU, 2025-01-20) Alemnew Amslau; Tewodros Negash (PhD)
Ethiopia, like any other emerging countries, has demonstrated poor economic performance. Although the fact that the country's current economic performance is highly remarkable, there are a number of challenges to sustain the present trend of economic growth. The main challenge is the availability and scarcity of energy sources. Energy is a driving force of development and plays a significant role in the country’s economic growth and prosperity. Ethiopia's economy is heavily dependent on imported petroleum products. Petroleum is one of the most important commodities in social, political and economic challenges. The main objective of the study was to examine the impacts of petroleum consumption on economic growth. Specifically, it determined the short and long run relationship between petroleum consumption and economic growth. It also examined the impacts of petroleum price on economic growth, to analyzing and showing the trends of petroleum consumption and economic growth over the study period. It modified a growth model with GDP as the dependent variable and labour force, domestic capital investment and petroleum consumption and unit price of petroleum products as the independent variables to be estimated. An exploratory research design was used and research work followed a quanitative approach by using secondary source of data was used to collect information and Error Correction model was used to estimate. First, the study determined the stationarity of the variables by using ADF and phillips-perron test and its result shows that all the variables are non-stationary at levels but stationary at first difference. The Cointegration tests result indicated that the null hypothesis of no-cointegration was rejected at 5% level of significance. The estimation results of the long-run relationship revealed that the relationship between PC,AUPP and DCI with GDP was negative and statistically significant but LF was positive and not statistically significant. The estimated methods of the error-correction model shows that in the short run there was a positive and statistical insignificance impacts of lagged petroleum consumption on real GDP. The Granger causality test result shows there was unidirectional causal relationship between petroleum consumption to GDP. Finally the result concluded that petroleum consumption has negative impacts on economic growth and the country is recommended that to derives or formulate policy implications from the results obtained regarding the implementations of the upstream projects of the petroleum and gas industry and to develop in alternative energy sources as substitutes of petroleum products
The Determinants of Public Hospital Visiting Households out of Pocket Healthcare Expenditure in Addis Ababa
(Addis Ababa University, 2019-06) Selamawit, Tezera; Assefa, Admassie (PhD)
The sustainable development goals (SDGs) have encouraged governments to facilitate effective mobilization, management and optimal use of financial resources in order to ensure the goals are met and living standard of citizens are improved. The health sector is one of the main sectors that necessitate sustainable investment to achieve Universal Health Coverage and to attain higher standard of living. However when this is not happening, households will be forced to rely on out-of-pocket healthcare spending in order to purchase a good health. A hospital based cross sectional study was conducted in selected public hospitals in Addis Ababa by using outlier robust regression method with the aim of analyzing which socio-economic factors determines household’s out-of-pocket healthcare expenditure. The result of the study shows that income, family age structure, chronic disease, completing primary education and inpatient admission affect out-of-pocket healthcare expenditure positively while household size has a negative association. Therefore, real government’s commitment is required to reduce the huge burden on households by investing, properly planning and implementing quality health services that provide the necessary medicines as well as treatments for groups that are vulnerable to financial burden.
The Development of Agricultural Producers' Cooperatives in Ethiopia: Cases from Arsi Region
(A.A.U, 1989-06) Yirko, Wegenie; Gebre Kiros, Fassil (Dr)
This thesis is directed at the performance evaluation of the cooperatives sub sector - both at the macro and micro levels- as well as the study of the problems of development of the cooperate vies with a view of making recommendations which may enhance the development of the agricultural sector in general and the cooperative sector in particular . Results indicate that the performance of the cooperative sub sector at the macro level have been less than satisfactory . While the cooperative farms are becoming more and more resource intensive, productive Vities of the main factor s of production, l and labor are declining . This imply a need to counteract against factors which cause the decline . The climatic condition is one nbviou5 cause. The need to counteract the drought condition on the one hand, and the availability huge , labor or, the other then suggests labor investment towards the development of irrigated agriculture. Macro level studies also indicated poor performance of the cooperative sector compiled with the individual and state farms in terms of yield . From the view point of maximizing returns from l and to the society, this suggests retaining land under private holdings than placing them under cooperatives , which in turn may imply a slow rate of growth of t hat sub sector . The performance evaluation of the cooperatives at the micro level was specifically directed at looking in to their allocate efficiency. Towards that end this study was conducted on 26 agricultural producers' cooperatives in Arsi Region . These cooperatives were classified into groups on the bas is of techno logical factors. Representative farms were derived from each group and Linear Programming mode l s were developed for each of the representative farms . comparison of the acute with the optima pattern indicated sub-optimality their cropping pattern,. In all cases results suggested a reallocation of land away from the two basic products of the region. great and barley to other crops . The optimal pattern which was obtained from the computer analysis differed from one typical farm to another - a situation which suggest a differentiated l and use policy. as far as resource use is concerned, l and, in the optimal solution was found to be a limiting factor, in all the cooperatives, whose marginal value product increases with a decrease in land - labor ratio suggesting a need for an appropriate land holding and land allocation policy for each of the cooperatives with takes resource availability of the cooperatives into account. Our study also showed underutilization of plowing labor and ox power. still, however, during this operational of period cooperatives utilize hired tractors. Underutilization/labor and Ox power, on the one hdnd, and the use of harder tractors on the other then implies a need to ovoid hired tractors, which, in turn suggest a need to look into the governments' policy of hiring stat ions. The Optimal solution also showed that weeding, harvesting and/or threshing labor are Limiting for same cooperatives. in these cooperatives, However, there exists abundant unutilized family labor. This then suggest a need to draw policy which will ensure the flow of f family labor into the operations of the cooper actives. in most of the socialistic countries this problem .was resolved by introducing family contract system The study also indicated a number. of problems which hamper the development of cooperatives. one important problems is the input - out put pricing system which creates disincentive on the cooperatives to increase their products . This problem is mainly the result of the Marketing policy of the government which restrict s the cooperatives sale of their produce to the AMC a problem whose solution call for the Introduction of competition the in the of inputs and the. Sale of output. other problems in clued the problem of declining income of Members which cannot cover their expenditure, problems of forced member and absence of democracy in the decision milking process, the solutions of which respectively require untying labor from,1I unnecessary operations of the cooperatives, so that it may create additional income, by introducing the family contract system, establishing the cooperatives in accordance with the principle of voluntarism and enhancing members' participation in the decision making process.
The Dynamic Relationship between Carbon Dioxide Emission, Energy Consumption, Economic Growth and Foreign Direct Investment An ARDL Approach.
(Addis Ababa University, 2016-06) ketsela, Dagmawit; Alemu, Tekie (PhD)
Economic Implication of Military Expenditure on Economic Growth: Evidence from Ethiopia
(Addis Ababa University, 2019-06) Naol, Kebede; Zerayehu, Sime (PhD)
This study was carried out to empirically examine the policy implication of military expenditure on economic growth in Ethiopia. Although national defense is an important function of government and security from external and internal threats that contributes to economic development, high military expenditures for defense or civil conflicts burden the economy and may impede growth. Thus, the paper was aimed at investigate the empirical economic implication of military expenditure on economic growth of Ethiopia and the paper also examined moderating effects of inflation and unemployment on the relationship between military expenditure and economic growth. The research employed secondary data for the period 1974/5-2017/18. In analyzing the long run and short run relationship between military expenditure and economic growth, Johansen’s co-integration test, VECM, and Granger causality test was applied. Further, forecast Error Variance Decomposition was obtained using the cholesky decomposition of the VECM and used the generalized impulse response function. The study found that military expenditure affect economic growth negatively. The finding showed that there was a unidirectional causality running from economic growth to military expenditure in the long run. From the empirical finding, impulse response function suggested that military expenditure negatively impacts economic growth and Variance Decomposition also revealed that military expenditure has no important impact on future growth rate of output in Ethiopia. The empirical finding also found out that inflation and unemployment have significant moderating effects on the relationship between military expenditure and economic growth in the long run. Finally, this study recommends policy makers to consider the effects of military expenditure and spend more resources on productivity, which is growth enhancing, reducing unemployment, stabilizing inflation as well as foreign exchange market.
Effect of E-Banking Service Quality on Customer Satisfaction: The Case of Nib International Bank S.C. In Addis Ababa
(A.A.U, 2026-02-01) Eyerusalem Melese; Abera Legesse
The primary objective of the study was to examine the effect of E-banking service quality on customer satisfaction at NIB International Bank S.C. in Addis Ababa. This research is highly relevant to stakeholders in the banking and financial services sector, as it offers practical insights into leveraging E-banking innovations to enhance customer satisfaction and maintain a competitive edge in a rapidly digitizing financial environment. A quantitative research approach with an explanatory research design was employed and data were collected from 390 E-banking user using structure questionnaires aligned with the study objectives and relevant literature. Statistical tools like explanatory correlation techniques and multiple regression analysis were used in data analysis. The finding indicated that all e-banking service dimensions recorded mean scores above the midpoint indicating generally positive customer perceptions. Customer satisfaction was positively and significantly impacted by responsiveness customer support security innovation and user interface according to correlation and regression analyses however ease of use despite its high rating did not have a statistically significant impact. The strength of the identified predictors was highlighted by the regression model which accounts for 72.8% of variance in customer satisfaction. The study concluded that while NIB International Bank had made significant strides in implementing digital banking channels more advancement in customer service, user interface design, IT infrastructure customer support mechanism, platforms efficiency, and cyber security measures were essential to enhance overall customer satisfaction
The Effect of Financial Inclusion on Household Income in Ethiopia
(Addis Ababa University, 2019-06) Tigist, Birhanu; Tadele, Ferede (PhD)
Financial inclusion is enabling the delivery of banking services at an affordable cost to the vast sections of disadvantaged and low-income groups. It is becoming a core element in economic growth, development, and poverty alleviation. Based on a nationally representative cross-sectional data from the Ethiopian Socio-economic Survey (ESS) carried out in 2015/16, this paper investigates the effect of financial inclusion on household’s income in Ethiopia. The study employed both descriptive and econometric approaches to data analysis. In the econometric section, Quantile regression and Propensity Score Matching methods have been used in order to control for endogeneity problem that may exist among financial inclusion and income. The finding indicates that access to finance has a significant positive effect on household's income. Financial inclusion has a larger effect on the lower quantiles of household income. The 10th quantile income of financially excluded households is 37 percent lower than financially included households while the top 90th quantile income of financially exclude households is 17percent lower than of financially included households. This shows financial inclusion benefits more low-income households than high-income households, which supports those findings that argue financial inclusion lowers poverty and income inequality.
Effects of Nutrition Sensitive Agriculture on Welfare Outcomes of Rural Women: The Case of Basona Worena and Angolela Tera Woredas of North Shoa Zone, Amhara Region, Ethiopia
(Addis Ababa University, 2019-07) Hanna, Lemma; Hailu, Elias (PhD)
Food insecurity and malnutrition are priority development challenges of Ethiopia. To counter the problem, the country embraced the nutrition sensitive agriculture approach and taken decisive measures relevant for wide implementation of the practice. Nutrition sensitive agriculture interventions that are implemented in worst affected parts of the country are already producing number of encouraging results. This study assessed the extent to which the desired welfare outcomes are realized in the intervention beneficiary Basona Worena Woreda as compared to the Agolela Tera Woreda that did not benefit from such intervention. Administratively, these woredas are situated in North Shoa Zone of Amhara Region. Purposive and simple random sampling procedures were used to select these two Woredas, and the 262 representative households respectively. The study employed key informants’ interview checklists and structured questionnaires to gather relevant data, which was then analyzed using descriptive statistics and an econometric propensity score matching model. The study findings demonstrated that the intervention has a significant and positive influence on assessed welfare outcomes namely women empowerment, on-farm production and consumption of nutritious diets, household income, and nutrition knowledge. Of the examined women empowerment domains, appreciable improvement was made in leadership and access to resources. Regarding the outcome on production and consumption diversity, mothers’ and children’s consumption was seriously constrained by sociocultural and religious factors. Despite these challenges, intervention beneficiary women and their children have had higher minimum dietary diversity than non-beneficiary women and their children. The home production of nutrient dense food sources positively affected the consumption of these items although extremely poor families opted to sale part or the entire farm produce in order to generate the badly needed cash. To countervail this challenge, future nutrition sensitive agriculture intervention programs should consider livelihood and income diversification opportunities as part of the scheme so as to allow the poor households use the home produced nutrient dense foods for intended purpose. In addition, the sustained and wider dissemination of the nutrition sensitive agriculture approach would require building the capacity of key actors and institutionalizing the scheme in the regular publicly supported extension programs.
Effects of Political Instability on Commercial Bank’s Performance in the Case of Selected Sub-Saharanafrica countries
(A.A.U, 2025-01-20) Getachew Molla; Abdurezack Hussein (PhD)
This paper evaluates the effects of political instability on commericial bank performance in case of selected sub-saharan African countries for the period 2016-2023. In order to test the proposed relationship a sample of under listed top three banks at the each countries was utilized. The study employed secondary data collected from annual audited financial report for each banks and world bank. In addition, macro economic variables including political instability indicators was gathered through world development indicators databases. The study was used fixed effect panel model to accomplish the proposed objectives. Diagnostic tests such as heteroskedasticity, cross sectional independence, serial correlation and multicollinearity test was performed before employing FE model. The result of fixed effect model indicate that ROA is significantly and negatively affected by political instability during the period of study, this mean there is a posetive relationship between political stability and bank performance. Internal determinants of commercial banks are very crucial and singnificant. Loan to deposit volume, bank’s size, and deposit volume, have a positive and significant impact on bank’s performance, where as non-performing loan have a negative and significant effect on bank performance. However, macroeconomic variable are insignificant. The study contributes knowledge in the field of political instability and bank profitablity for sub-Saharan African countries and all africa. As a result, this paper will provide a significant enhancement to the theoretical literature, the industry,and policymakers.
Essays on Development and Behavioral Economics: Examining the Interplay Between Shocks, Social Capital, Trust, and Prosocial Attitudes
(A.A.U, 2025-11-03) Abraham Seyoum; Peter Martinsson; Jonse Bane
The literature is unclear whether social capital can insure effectively against shocks. We provide evidence from rural Ethiopia, a setting characterized by prevalent shocks, lack of formal insurance markets, and functioning informal traditional institutions, using four waves of household panel surveys with over 6000 observations. We measure social capital as the social network -based resources available to rural households via local informal institutions, alternatively measured as network size, network diversity, and simple membership in institutions. Fixed effect estimation results show that the buffering role of social capital extends beyond insurance against idiosyncratic shocks, with variation across welfare and social capital measures. Social capital helps protect against multiple and simultaneous shocks, buffering shortfalls in not only total consumption but also food and consumables consumption. Rural households thus benefit from informal insurance in local institutions in the absence of formal insurance markets. Rural insurance policies and efforts to address food insecurity and rural development challenges should consider resources embedded in these institutions. Keywords: Social capital, social network, Local informal institution, informal insurance, shock
Essays on Firm Behavior and Performance in Ethiopian Manufacturing: Labor Demand, Capital Accumulation, and International Linkages
(A.A.U, 2025-09-22) Eyayu Tesfaye; Måns Söderbom
First and foremost, I am deeply grateful to the Almighty God for granting me the strength, health, and perseverance to undertake and complete this PhD journey. I am sincerely indebted to my principal advisor, Prof. Måns Söderbom, for his invaluable guidance, constructive feedback, and continuous encouragement throughout every stage of this research. His scholarly rigor and intellectual generosity have been a constant source of inspiration. I also extend my heartfelt thanks to my co-advisor, Dr. Atnafu Gebremeskel, for his insightful comments, support, and contributions that greatly enriched the quality of this dissertation. I am grateful to the Department of Economics at Addis Ababa University, the Environment for Development (EfD) initiative, and the University of Gothenburg for providing a stimulating academic environment, access to resources, and institutional support. I also thank the Swedish International Development Agency (SIDA) for the generous financial support that made this research possible. My appreciation extends to the staff of the Ethiopian Statistical Services (ESS), Dr. Tadele Ferede, and Dr. Tsegay Gebrekidan for facilitating access to the firm-level datasets used in this study. I would also like to thank International Growth Center (IGC) for the PhD fellowship opportunity. I am grateful to Adrian Poignant, Postdoc researcher at University of Gothenburg for his constructive comments. Special thanks to my fellow PhD colleagues, friends, and faculty members for their encouragement and moral support. Finally, I dedicate my deepest gratitude to my family, especially my wife, Dr. Asresie Tesfaw, and my children, Eyoas and Zemichael, for their unconditional love, patience, and unwavering belief in me. Your sacrifices and support sustained me through the most challenging times. To all who contributed to this work, directly or indirectly, I offer my sincere thanks.
Explaining Ethiopia's Foreign Trade Potential: A Dynamic Gravity Approach
(Addis Ababa University, 2011-06) Gebrehiwot, Gebreyessus; Geda, Alemayehu (PhD)
Towards improvement of Ethiopia's poor performance in the global trading system, the main objective of this paper is to estimate trade potential of the country with major trade partners around the world. The gravity model of trade has been duly employed for the purpose. For the sake of plausible results, recent innovations of the gravity model are incorporated as well. Specifically, a dynamic gravity approach based on a panel dataset of sample countries was estimated by System GMM estimators to first analyze the pattern of (basic vs export) trade flows. The coefficients obtained are then used to predict the basic trade and export trade potentials for Ethiopia. As a result, we found that the dynamic gravity model fits the data well, indicating the presence of hysteresis in trade. Besides, the traditional gravity variables are all significant with anticipated signs. The last major finding of the study is that considerable part of the country's potential trade has remained unrealized. The magnitude of trade potential was found the highest with Asian, European and then African countries as a continent. The study recommends that export diversification which advances the narrow export dependency, improvement of infrastructure which reduces transaction costs, and bilateral trade negotiations stepping up the current status of the external sector are the necessary steps to exploit Ethiopia's untapped trade potential. Key Words: Dynamic Gravity Approach, Ethiopia, Trade Potential.
Factors Affecting Adoption of Mobile Banking: A Case Study on The Commercial Bank of Ethiopia
(A.A.U, 2026-02-01) Matiyas Worku; Yared Asrat; Tilahum
This study was conducted to understand and analyze the foctors influencing the adoption of M banking with CBE as the case study and in the context of Addis Ababa, at selected branches of the bank. It was conducted by employing the Technology-Organization-Environment (TOE) framework, which mainly focus on examining determinants of M-banking adoption at firm level. A total of 139 valid responses were collected out of 155 questionnaires distributed to the randomly selected digital banking staffs of CBE at selected branches of Addis Ababa. The questionnaire’s reliability was confirmed with a Cronbach’s Alpha value of 0.90. This study adopted quantitative research approach and it is based on closed end questionnaires with 5-point Likert-scale. Multi stage sampling was employed to select respondents for this study. The collected data from respondents was analyzed using SPSS software version 23. A descriptive and regression analysis method was employed to analyze the collected data. In addition, interview was conducted on key informants to reinforce the quantitative findings. A secondary data was reviewed from several publications to support the findings of this study. The result of the regression analysis shows that the most significant influence on M-banking adoption arises from the technological factors of the TOE framework. But organizational and environmental factors were found to have no statistical significance in the multiple regression, this is likely due to the shared variance which is observed in the correlation analysis among the independent variables. Overall, the regression model was able to explain 30.6% of the variance in m-banking adoption were organizational and environmental factors were found to be statistically insignificant likely due to the shared influence and suppression effects among the explanatory variables. The interview responses from key informants indicates that external barriers such as unstable national internet connectivity, internal challenges like frequent service interruptions, customers' need for physical receipts, and strong concerns about fraud and social-engineering were the main challenges that hindered the adoption of M-banking adoption at CBE. Keywords: M-banking, adoption, TOE, CBE, technology, organization, environment
Factors affecting customer retention in the Ethiopian Banking Sector (Study on Commercial Bank of Ethiopia customers in Addis Ababa)
(A.A.U, 2025-12-01) Aregaw Tadele; Abera Legesse
This study looked at how customer experience and quality service affect customer retention in the Ethiopian banking sector. It focused on the mediating roles of customer satisfaction, trust, customer loyalty, and corporate image. The study aimed to address ongoing challenges in customer retention that banks face, even with service improvements and growing competition. A quantitative, explanatory research design was used with a cross-sectional survey approach. Researchers collected data from 389 bank customers through structured questionnaires, using simple random sampling. They analyzed the data with descriptive statistics, correlation analysis, and multiple regression techniques. They performed mediation analysis following the Baron and Kenny method, along with Sobel tests to check the significance of indirect effects. The findings revealed that customer experience and quality service has a significant and positive effect on customer retention. Furthermore, customer satisfaction, trust, customer loyalty, and corporate image were found to significantly mediate the relationship between customer experience and customer retention, indicating both partial and full mediation effects across the proposed pathways. These results highlight the importance of managing not only service delivery but also relational and perceptual factors to enhance long-term customer relationships. The study adds to the existing literature by expanding customer experience and relationship marketing theories through a detailed mediation framework in the Ethiopian banking context. It offers practical insights for bank managers and policymakers, highlighting the need for overall customer experience strategies and quality service to boost customer retention and maintain a competitive edge. The study also suggests future research directions, especially in using longitudinal designs and comparing different sectors. Keywords: Customer Experience, Quality service, Customer Retention, Customer Satisfaction, Trust, Customer Loyalty, Corporate Image, Ethiopian Banking Sector
Foreign Direct Investment and Uncertainty: Evidence from Sub-saharan Africa
(A.A.U, 2021-06) Tarekegn, Getasew; Boka, Jonse Bane (PhD)
This paper examines how macroeconomic, political, and property rights uncertainties in affecting FDI inflows into sub-Saharan Africa (SSA). The study applies both fixed effect and Arellano-Bond GMM dynamic panel data models for a sample of 26 sub-Saharan Africa countries over the period from 2000 to 2018. The study conducts model diagnostic and stationarity tests to ensure that estimation results are reliable. The findings of the study show that macroeconomic uncertainty as proxied by inflation and exchange rates are negatively related to the inflows of FDI to SSA. Our results also show that property rights uncertainty as proxied by rule of law has a positive effect on FDI inflows while, investment profile has negative effect on FDI inflows to SSA. Similarly, the overall measure of political uncertainty is negatively associated with FDI inflows to SSA. However, internal and external conflict, corruption, and bureaucratic quality have no significant effect on FDI inflows to SSA. Other variables included in the model, such as trade openness, rate of return on capital, and infrastructure, have a positive impact on FDI inflows. The policy implications of the study are that governments in SSA could attract more FDI by minimizing political risks, improving property rights enforcement, and managing key macroeconomic variables like inflation and exchange rate.
Households’ Willingness to Pay for Improved Water Services in Debre-Zeit Town, Ethiopia
(Addis Ababa University, 2007-08) Fanta, Gossaye; GebreEgzibeher, Tegegne (PhD)
Water is vital for life. However, many people especially in developing countries have no access to adequate potable water services. In Ethiopia in both urban and rural areas many people do not get safe clean water. The need for clean potable water is high. Debre Zeit town has high water shortage problem. In this study the contingent valuation survey method is employed to analyze households' willingness to pay for the improved water services. In this study survey responses of 234 randomly selected sampled households from all kebeles Debre Zeit town were analyzed through descriptive and econometric analysis. The survey result shows that 99.57% of the survey respondents use pipe water. However, only 10.26% of the respondent satisfied with the status quo level. All survey respondents expressed their willingness to pay above the existing tariff level, though the amount of money they are willing to pay varies from individual to individual. That is, if the improved system is implemented the authorities can collect more money from water sale and at the same time the water need of the households would be satisfied. The survey result also shows that mean willingness to pay for one bucket or for 20 liter of improved water service is 10.2367 and 12.4786 cents according to the dichotomous choice and open-ended survey responses respectively. The total willingness to pay for one bucket or 20 liters of improved water services is 262,781.45 cents or Birr 2,627.82 per day or Birr 959,159.30 per year. Thej Results of both Probit and OLS econometric models show that age, household size, reliability dummy and the income variables influences households’ willingness to pay for the improved water services in the Debre Zeit town. Therefore in designing the improved water supply system for the town policy makers need to take these socio- economic and demographic factors and water attributes into consideration.
The Impact of Pesticides on Maize Production in Southern Ethiopia
(A.A.U, 2021-06) Yaynie, Yordanos; Araya, Mesele (Dr)
Maize production is an important economic activity among smallholder farmers in southern Ethiopia, serving as a major source of income and food security. Maize farmers often use pesticides to control pests, but it poses environmental and human health risks. While the productivity of pesticides has been previously studied, most studies treated pesticide as a direct yield enhancing input rather that a damage reducing one. In this study, we analyze the productivity impact of pesticides using a damage control production function. We estimated Cobb-Douglas production functions using Nonlinear Least Square (NLS) and Two Stage Nonlinear Least Square (2SNLS) methods. We use panel datasets collected in 2018 and 2020 in the southern Ethiopia by the Social Sciences and Impact Assessment Unit of the International Centre of Insect Physiology and Ecology (icipe). The results of the NLS regression indicated that pesticides have no significant effect on maize yield. However, when we use the 2SNLS to control for endogeneity of pesticides, the coefficient of pesticides remains positive and statistically significant, indicating that it increases maize yield. The first stage estimated results of the 2SNLS indicates that pesticide use is affected by pesticide prices, contact with extension agents, application of organic fertilizers and the socio-economic characteristics of households. Furthermore, the marginal product of 1 liter of pesticide is found to be 51 kg of maize yield, which indicates that pesticides reduce yield losses due to pests. Calculations of optimal amount of pesticides show that farmers could maximize their profit at an average of 8.4 liters of pesticides. An average quantity above or below this value indicates an overuse or underuse of pesticides. However, this estimate is from the private profit maximizing point of view, but it is important to consider the health and environmental effects of pesticides. To fully understand the societal cost of pesticides, future studies may need to collect data on not only the private benefits, but also the potential costs associated with public health and the environment.
The Impacts of Microfinance Institution on Household’s Livelihood; The Case of Oromia Credit and Saving Share Company and Busa Gonofa Micro Finance Institution of Jeldu Woreda.
(A.A.U, 2019-10) Jifara, Lemesa; Wassie, Birhanu (PhD)
The prevalence of poverty has been a common phenomenon in Ethiopia. Microfinance has been introduced and currently it is being practiced in the country as a tool to deliver financial service to the poor with the objective of reducing poverty and improve household livelihood. This paper examines the impacts of microfinance on household livelihood in Jeldu district, Oromia regional state. The study uses cross-sectional data collected from Jeldu woreda households to derive the empirical evidence. Propensity score matching was used for identify the impacts of microfinance intervention on improving the living standard of poor household in comparing client and nonclient household. In this scenario, this paper found that credit has a significant and positive impacts on household average yearly income, consumption, Education, health care, employment generations and housing condition in comparing with non-client respondents. These findings confirm that credit provided for rural household is an effective policy tool to reduce poverty. Therefore, strengthening the existing operation of microfinance in the region would be appropriate socio-economic policy
Macroeconomic, Institutional and political Determinants of Foreign aid Inflows: Evidence from selected sub-Saharan African Countries
(A.AU., 2023-06-01) Yimer Ali Mekonnen; Abdurezack Hussien (Ph.D)
Using Blundell and Bond's one-step system GMM after controlling economic variables, this study evaluated the macroeconomic, political, and institutional determinants of the flows of official development in 40 SSA nations for the period 2002-2021. In order to reduce the possibility of multicolinearity and raise the weight of the variables, it calculated a weighted index using principal component analysis from the six governance indicators to quantify political stability and institutional excellence. The study's findings showed that institutional quality, the consumer price index, and lagged value government development assistance have a favorable influence on the flow of aid by 1% level of significant. The flow of government development assistance into SSA nations is also restricted by political stability, GDP per capita, and trade volume by 5%, 1%, and 1% level of significance. The study's policy recommendation is that governments in SSA nations can attract foreign capital by enhancing institutional quality and their ability to increase political stability and citizens' per capita income.

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