Linking rural and urban areas for development in Ethiopia

Linking rural and urban areas for development in Ethiopia

Published Mar 2006

Authors

Stefan Dercon, John Hoddinott, false

Publisher

Focus countries

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Linking rural and urban areas for development in Ethiopia

Development theory and practice tends to separate rural and urban areas but the failure of government-led rural development strategies in Ethiopia indicates this may not be a realistic division. The linkages between rural and urban areas, particularly the economic opportunities provided by urban markets, are often neglected.

A paper from theInternational Food and Policy Research Institute looks at villages in rural Ethiopia to examine the linksbetween rural households and local urban centres. The researchers considerwhether better access to local markets affects the economic behaviour of ruralhouseholds and if this leads to improved standards of living. Rural and urbanareas are often considered separately in development and are addressed by projectsthat fail to take account of the many links between them. Knowledge of theselinks is crucial to regional development and poverty reduction strategies.

By considering ruralareas in isolation, many rural development projects neglect the opportunitiesand constraints that markets in neighbouring urban centres can provide forrural households. This has been highlighted by the failure of Ethiopia’s rural developmentstrategy, which focused on rural areas and agricultural growth to reducepoverty and hunger.

Urban areas, includinglocal market towns, provide rural households with new opportunities to sellgoods and services. Rural households can therefore direct their resources tomore profitable economic activities in larger and more stable marketplaces.Market towns can also provide rural areas with better quality and more easilyavailable goods for agriculture or consumption. However, access between ruralhouseholds and local urban areas is essential.

The researchers findthat in rural Ethiopia:

  • Ruralhouseholds carry out a significant part of their economic transactions in localmarket towns, including selling most of their crops, livestock (a quarter tothree quarters) and artisanal products, and buying goodsfor agriculture (about half their purchases) and various types of food andconsumer goods (more than half of purchases).
  • Accessto market towns affects the economic activity in rural areas: the more remoterural households are from these towns, the less likely they are to buy goods orsell a variety of products.
  • Improvedaccess to market towns through roads and transportation has a positive effecton rural welfare, with increased consumption and community growth rates.

These findings indicatethat local market towns are crucial to the economic activities of ruralhouseholds, and also that urban centres benefit from the demand from ruralareas. The authors suggest that policymakers:

  • viewrural and urban areas as a continuous territory that ranges from the capitalcity to smaller urban centres to rural households rather than as distinctareas, and plan development strategies that tie them together
  • improvethe existence and quality of roads, along with transportation facilities
  • encourage research on how improved access tosources of income leads to an increase in consumption.

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