Market Oriented Reforms and Changes in Urban Household Income: A Study in Selected Small Towns of Ethiopia

Ethiopia's economy, which was ailing severely during the 17 years of heavy-handed rule by a Marxist junta, recovered considerably following the introduction of market-oriented reforms during the early 1990s. Nonetheless, as the results of a household survey conducted in four small towns of the country show, it seems that the negative consequences of the reforms have outweighed their expected positive outcomes. In general, the findings suggest that the incidence of poverty has increased considerably in the study towns. On the whole, households in the small towns of coffee producing regions fared considerably better than those found in the towns of predominantly grain producing regions. It also appears that the economic liberalization has led to a considerably wider gap between the wealthier and the economically less fortunate households of the study towns.