Converging Dynamics of Urban Land Lease Systems, State-Controlled Land Ownership, and Neo-patrimonial Governance: Exploring Contradictions in Addis Ababa, Ethiopia

2.1 Leasehold and freehold: Comparative perspective

Urban land systems have potential for shaping urban development aspects. Land tenure can be viewed as the set of laws that describe how people access, utilize, and transfer urban land. Land can be freehold (private ownership), leasehold (state ownership but temporary use rights given), or a combination of the two (Peterson, 2006; Slangen & Polman, 2008). The division between these implies a political philosophy about the state, market, and social justice, not merely a technical matter.

The freehold land system, common in the United Kingdom and the United States, is essential for fostering tenure security, rewarding investment (private), and facilitating market-based land allocation (Krutilla et al., 1983). However, under conditions of weak governance, it can lead to land concentration, speculation, and uprooting of polarized urban residents, which occurs in some parts of Latin America (Smolka, 2013). The UK’s experience is a good example of this. The high level of privatization shrinks social housing stock and exacerbates long-term spatial inequality (Wolfe & Muller, 2018).

On the other hand, states employ a leasehold approach to control land allocation and steer urban progress, for the common good of the urban community. The Dutch and Swedish experience can illustrate this. In both cases, land leases are deployed to capture land value for public reinvestment and conduct coordinated urban planning (Meijer & Jonkman, 2020; Needham, 1997, 2016; Van Oosten et al., 2018). These countries possess strong institutions, with a good culture of the rule of law, and enforce the leasehold system rightfully, thereby driving equity, affordability, and enduring urban progress.

The comparative analysis helps gain insight. The role of the state (politics) matters a lot in whether the leasehold system achieves its promises of utilizing urban land in an equitable manner for common gain. Quality institutions, with transparent, accountable, and rule of law, a leasehold regime functions well (Ryan-Collins et al., 2017), but in a governance system dominated by patrimonial order, leaseholds fail to achieve their positives, rather become a political tool for power consolidation and governed by elite interest (Aytenew et al., 2025; Goodfellow, 2017; Koroso, 2023). This is the dilemma Ethiopia faces today, and the paper aims to explore this.

2.2 Neo-patrimonial Governance and urban Land policy

Neo-patrimony is a broader concept that primarily combines two sets of rules: formal bureaucratic and informal patronage rules (Bach & Gazibo, 2012; Booth & Golooba-Mutebi, 2012; Kelsall, 2011). Personalistic authority guides resource allocation, including state domain urban land, and resource distribution doesn’t align with merit or policy; mainly, political network directs the rule, and urban land serves as an instrument to gain political loyalty and strengthen regime power (Bonga, 2021; von Soest, 2021). Clients adhere to ideology to gain something in return, including benefits arising from urban land.

The concept of neo-patrimonialism emerged from the explanations of Max Weber (Becker & Vasileva, 2017; Herrmann, 2010; Njoku, 2020). This is the case where rulers distribute public resources as private property for those loyal to their regime. The phrase “neo” signifies the presence of formal and informal institutions in a mixed manner. Public offices and state resources are not used for the welfare of society, but rather for private and allies’ economic gain through the mechanisms of clientelism, corruption, and rent allocation, even if modern bureaucratic laws and organizational structures exist nominally.

Rent produced and distributed through the lines of political office, such as land allocation, licenses, and contracts, often take official support access as the primary path to wealth and economic gain, in which the market and the formal system remain weak and ineffective (Kelsall, 2011, p. 11; Lodge, 2014; Njoku, 2020, p. 202; Richter & Steiner, 2008; Vidal, 2018). This approach misuses public assets, hinders societal wellbeing, and leads to poverty.

Urban land has increasingly become a vital asset within the environment of a patrimonial governance system, as its scarcity, high value, and capital-hoarding role make it a crucial currency for exchange between clients and patrons (office holders) (Gray & Whitfield, 2014). Patrimonial networks often distort urban land allocation efforts into “rent competition arenas”, people can chiefly access it through affiliations, political ethnic, or bribes, rather than actual needs or criteria (Benditt, 2015; Gbaguidi, 2022; Goodfellow, 2017; Ndi et al., 2021). Such a governance system strengthens the cycle continuously; officials utilize urban land to consolidate political power, which in turn strengthens political power over organizations mandated to administer urban land.

The leasehold system, where the state owns urban land, is particularly prone to patrimonial exploitation. Leasehold centralizes decision-making power in the hands of officials, unlike freehold, where private ownership exists, and private property is legally protected. In the patrimonial system, officials are gatekeepers for pricing, renewing, and revoking land lease rights. This concentration of power offers opportunities for discretionary, opaque, and promotes affiliated decision-making (Fukuyama, 2013). This theoretical connection exists in nascent form in the academic literature on African urban politics, specifically in the leasehold context (Beza, 2021; Davies, 2008). This requires robust empirical work in the specific context of Ethiopian cities, such as Addis Ababa.

Apparently, the literature offers a conceptual bridge on how neo-patrimony and urban land lease relate. That is, land is the primary resource politicians use to control their rents; activities such as allocation, leasing, and land redevelopment are areas where patronage converts political action into economic return.

2.3 Historical evolution of land tenure in Ethiopia: The roots of state-centric control

The past has a huge legacy on the contemporary Ethiopian urban land governance, as privatization and nationalization occurred at different points in time, and centralized governance dominates the administration (Yusuf et al., 2009; Gebremichael, 2017; Teshome-Chala, 2016). The governance of land across different times and regimes in Ethiopia has shown no progress, with land being employed as a political instrument, and is less likely to benefit the larger community. Officials, elites, and brokers gain disproportionate rewards from the land, particularly urban land. This section reviews land policy in Ethiopia at various periods: Imperial regimes (Pre-1974), Derg, and post-1991.

2.3.1 Imperial regimes (Pre-1974)

Emperor Menelik II (Ruled from 1889-1913) was the first ruler in Ethiopia to formulate a legal framework for land governance, the ‘1907 Land Decree’, which privatized urban land in Addis Ababa, and buying and selling land was possible in the market (Munro-Hay & Pankhurst, 1995). However, in practice, nobles and loyalists were the main actors and beneficiaries. If needed, one’s land can be taken by officials with due or less satisfactory compensation (Gebremichael, 2017).

Emperor Haile Selassie I succeeded Emperor Menelik II. The emperor codified private land ownership through the 1960s civil code, yet land had been at the heart of politics, and the landlord-tenant relationship was in operation. Students, residents, and other segments of society revolted against the king, demanding “land to the tiller” (Gebremichael, 2017; Hafte Gabrihet & Pillay, 2021). Thus, land didn’t escape from being an instrument of politics and patronage. Officials and other affiliates could take a large tract of land for political allegiance.

2.3.2 Post-1974

Derg came to power in 1974, toppling Emperor Haile Selassie I, and lost the throne in 1991 via rebel forces led by EPRDF (Ethiopian People’s Revolutionary Democratic Front). Derg, a military group, adopted Marxist ideology, eradicated private ownership through Proclamation No. 47/1975, and nationalized all land, urban or rural (Bonsa, 2012; Teshome-Chala, 2016). The regime abolished the landlord- tenant structure and distributed land for each farmer household and answered ‘land to the tiller’ questions. Though the regime eradicated the feudal system, land remains under tight and monopolized state control, absolutely prohibiting land transactions and hindering efficient land use and investment.

After coming to power in 1991, EPRDF introduced a federal ethnic structure as a governance model, kept land under state domain (Lease Proclamation No.80/1993; Federal Democratic Republic of Ethiopia [FDRE] constitution under its art.40/3/, which was out of the expectation of domestic scholars and the international community. The expectation originated from the fact that the new regime ideologically adopted a free market economy and introduced a market-based urban land lease system, as revealed in the lease proclamation as aforementioned (Lavers, 2018). This situation facilitates land to operate under a lease system, state ownership, and neo-patrimonial land governance. The protests against Addis Ababa’s master plan, 2014-2016, were a good example of the land‘s continued political influence (Gebremichael, 2017; Hafte Gabrihet & Pillay, 2021; Teshome-Chala, 2016).

The historical urban land review consistently shows that land has often been and is an instrument of political consolidation in Ethiopia (Davies, 2008; Gebremichael, 2017; Koroso et al., 2020). The lease policy operating aims to balance state control of land with market operation (Aytenew et al., 2025; Weldesilassie & Berihu Assefa, 2017). The empirical works in the literature, however, have not sufficiently and clearly analyzed how the neo-patrimonial political institution affects the urban land lease institution. The system’s patterns of inclusion and exclusion in Addis Ababa ought to be better explored.

Comparative literature depicts divergent outcomes in varied tenure systems. In Hong Kong, Singapore, and Canberra, leasehold is predominantly public, supporting effective urban planning, generating revenue, financing public infrastructure, and leading to sustainable urban development that ensures equitable access for the urban community (Chi-man Hui, 2004; Giglio et al., 2015). Furthermore, the state lease systems in countries such as the Netherlands and Sweden ensure affordable housing supply and curb speculative gains (Caesar, 2016; Hamersma et al., 2017; Mandell, 2002). The systems introduced indexed rents and social inclusion conditions to promote public welfare over private gain.

In Latin America and Africa, however, freehold has not functioned in a manner that improves the welfare of urban society. The freehold system fuels inequality and increased concentration of land in a few hands (Aiyede & Afeaye, 2018; Bach, 2022; Kelsall, 2011). The poor are forced to find informal solutions that are less reliable and secure. The UK has a blended leasehold system, but freeholders escalate ground rent extraction and reinforce wealth inequality (Andrew & Culley, 2023; Bright et al., 2026; Ward & Brill, 2024). This implies that leasehold arrangements expand inequality in the absence of strong, accountable, and transparent land administration.

In developed countries, freehold and leasehold supported by the rule of law function well, are more predictable, have better contract enforcement, and minimal discretionary power over land allocation (Di Matteo, 2021; Turner, 2017). Public leasehold is a technical matter, not serve as a mechanism for patronage (Agheyisi, 2021; Wagah et al., 2017; Payne, 2001). Whereas in developing countries, either state becomes a radical title holder, or dual (statutory and customary) regimes are common in countries like Ghana, Uganda, and Nigeria. In contrast, the poor institutional setups, fragmented records, and high and wide discretionary decision-making power create suitable conditions for the proliferation of neo-patrimonial bargains over urban land (Chimhowu, 2019; Sumbo, 2022; Turner, 2022). In many African and Asian cities, both formal leasehold and “neo-customary” systems generate tenure insecurities. Leaseholders may be unsure whether the lease terms can be renewed. Pre-urban residents lose usufruct rights when chiefs capitalized land, in African countries (Agheyisi, 2021; Banerjee, 2022; Payne, 2001). The tenure insecurities selectively operate in favor of politically connected groups or individuals.

3.1 Research framework

The article integrates data sources (policy analysis, literature review, and interviews) through an iterative back-and-forth approach to avoid rigidity, refine insights, and increase the reliability of analysis. The literature review establishes the conceptual foundation by framing neo-patrimonial order as a blend of formal and informal patronage (discretionary decision-making, clientelism) that adversely affects urban land allocation in contexts like Africa. This perspective informs lease policy analysis, which explores the 1995 Ethiopian constitution, land lease proclamations No. 80/1993, 271/2002, and 721/2011, to examine mandates given to the political elites, mayor, cabinet, and city councils. Key informant interviews generated from diverse resources, including policymakers, lease experts, civil society, mainly academic, put policy and literature ideas to the test of real-world practice. The results from the interviews are compared to the lease policy provisions to demonstrate where the legal loophole exists, distorting implementation, and then continue reassessing it against the theoretical framework. See the visual framework in Figure 1 below.

Figure 1. Framework for integration of data sources.

3.2 Sources and procedures

3.2.1 Policy document analysis

This involves analysis of the contemporary national constitution, including provision 40[3], land lease proclamations, the first Proclamation No. 80/1993, amended proclamation No. 271/2002, and the current No. 721/2011. The thematic analysis focuses on three linked perspectives:

3.2.2 Literature review structure

The literature review aims to establish an analytical framework on three themes: theories of patrimonialism, including clientelism and rent-seeking, and to generate a comparative analysis focusing on leasehold and freehold approaches, and finally, analyzing historical and present Ethiopian political economy and land tenure.

3.2.3 Key Informant Interviews (KIIs)

Key actors approached through a purposive mechanism approached their offices and used snowball sampling. The purpose of the study was elaborated, secure anonymity and agreement orally. The participants of the interview were categorized into three groups: Group A includes officials, Addis Ababa Land Development and Administration Office (4), and two (2) from the Ministry of Urban Development and Infrastructure. The second group (B) comprises six (6) urban land experts, urban planners (4) urban planners from the city administration, and two (2) from the private sector consultants. The third consists of civil society (C), the Ethiopian Economic Association/Academia/, and five (5) researchers.

Protocol: each interview took 45-75 minutes, depending on the circumstance and note taken. Interview guidelines were organized around the research questions sought to answer. These include:

State land ownership and its objectives (prompts one): how does state ownership of urban land influence the management of urban land lease? Does this facilitate or hinder the realization of equitable development stated in the policy?

Second prompt, Discretion and decision-making power: Can you explain the entire process of lease allocation? In the lease proclamation, where do you see room for wide or arbitrary interpretation? Who are the key decision-makers in the lease process?

Equity and Access (guide 3): In your experience, what factors influence accessing land lease rights? How are strategic or community need projects actually defined?

Informal practice (prompt 4): What irregular norms or relationships shape how urban land lease functions beyond the formal system?

Follow-up questions for probing, such as Do you have specific details? or How do you compare it to the formal procedure? Were used to elicit more narrative.

3.3 Data analysis

The study employed a hybrid thematic analysis, deductive (theory) and inductive (data-driven) coding. The steps involved include: familiarization and initial coding of interviews, literature, and policy documents. It involves theme development themes, which entails categorization into candidate themes. The synthesis process incorporates evidence from the three resources, organized around three themes as shown in Table 1.

3.4 Validation

Members confirmed initial results after checking, and two from each group validated interpretive accuracy. In addition, peer briefing was conducted, analysis and coding were discussed continuously with academic colleagues experienced in qualitative methods, and a detailed research log was maintained. The codebook has been archived in Zenodo ( 10.5281/zenodo.18221025 ) to ensure transparency and replicability.

4.1 State Ownership Fuels Patrimonial Networks

Informant interviewees have different views on the state domain of urban land, and stark conflict exists. Authorities explain that state ownership of land is desirable for balanced development and helps minimize speculative control, with one official stating that state control of land “ensures coordinated development and prevents speculation, but in practice it requires strong political guidance to prioritize public interests. Another authority recognizes access as a “favor processed through the system, not a right. On the other hand, civil society representatives and land experts perceive the state monopoly of land as a facilitating to exclusionary practices, with one civil society or academia informant claiming that “ownership is not with ‘the people’ but with the state apparatus, which is controlled by the ruling regime”, and a land expert warning that “the monopoly is justified for equity, yet without transparent approaches it inevitably creates dependencies on decision makers”. Another civil society underlines the transformative effect: “Public ownership sounds progressive, but it has turned urban land into a tool for rewarding loyalty while the urban poor wait indefinately”. This diverse view depicts how state ownership of land, aimed for public interest protection, functions in reality as a “gateway” to patronage allocation.

Land lease policy analysis strengthens the insights through Article 40 [3] of the Ethiopian constitution (FDRE Constitution, 1995), which endows all land ownership rights in the state and “the people of Ethiopia” that prohibit sale or exchange, reinforcing complete control that confirms with interviewees’ definition of land access as “privilege” rather than a right. The lease policy frameworks, such as 80/1993, 271/2002, 721/2011, maintain the constitutional framework without the formulation of an unbiased, rule-based, and impartial urban land allocation system. The state uses ownership as a tool to strengthen political power and patron-client network; only those within the network of the political system get rewards from the lease regime.

The theoretical frameworks, von Soest (2021), Kantor (2019), (Koroso, 2023), Njoku (2020), and Kelsall (2011) conceptualizes state control of limited resources, such as land, as a means for the distribution of rent and establishing a loyal network in a neo-patrimonial milieu. The Ethiopian land lease policy case highlights this contradiction: while use of urban land for public welfare provides a rationale for the state domain, lack of rational, impersonal institutions allows the monopoly to serve as political currency, shifting the constitutional framework into an enabler of clientelism and patronage. This interplay marks how state-centric systems can inadvertently fuel a patrimonial political order rather than limiting these patrimonial challenges to promote the common good.

4.2 Discretionary power & Centralized decision-making

Interviewees consistently confirm the presence of a blended governance structure in land allocation. An authority reveals the informal mechanism by explaining, “We follow the ‘green line’, informal approval from top hierarchies, before paperwork begins, while a land expert explains how “‘strategic’ projects are never defined” and employed as “a cover justification for any development project favored by the political hierarchies’, technical aspects virtually ignored. Divergent perceptions come out on the concept of discretionary decision-making: an official reasoned it as crucial, elaborating that “discretion allows flexibility for urgent public projects; neglecting it, the formal system would hinder development,” whereas a land expert cautions that “centralization is meant to align with national priorities, but lack of clear criteria makes every exception vulnerable to influence.” A Civil Society interviewee critiques this uncertainty clearly: “What they call ‘strategic’ is often just a code for allocating prime land to connected investors.” These explanations highlight that the formal system is not operating well, is symbolic, and is plagued by patronage linkages.

The policy analysis complies with this through Proclamation 721/2011, Article 8[1], which allows grants for unclear “strategic development projects that have high public significance,” and Article 5[4] gives the power of directive approval for the cabinet, institutionalizing uncertainty and political control at the top hierarchies. The presence of these specific clauses portrays intentional design that emphasized informality over formal and clear, rule-based operations (Aiyede & Afeaye, 2018).

The theoretical setting, Fukuyama (2013), Aiyede & Afeaye (2018), and Bach (2022) assert that discretionary decision-making power in less developed countries is used as an instrument for patrimonial decision-making, formal operations dominated by an informal institutional setup that function in diverse form of favor and bias. The empirical evidence shows how technical lease policy frameworks create a complex rational-legal facade that insulates a dominant patrimonial institution. This “patrimonial recapture” of bureaucratic shifts demonstrates the hybrid form of the neo-patrimonial political economy. The formal institutions provide fertile ground for informal domination rather than reducing their influence on the formal system.

4.3 Ethnic & Political alignment in access

Ethnic and political affiliations have a greater influence on determining urban land distribution, as the informant participants reveal. An expert describes, “Your application moves faster if you have a ‘referral’ from a certain relevant ethnic group or party office. It is an open secret. “Civil Society informants articulate exclusion vividly, with one describing, “if you are from a non-dominant group, you are an outsider in your city,” and another stating that “land is treated as the asset of the politically dominant group. If your identity card and political network do not match those of the officeholder elites, you become an outsider.” A systematic perspective emerges as well: a land expert acknowledges a constitutional aim but warns that “ethnic federalism is constitutional, but applying it to urban land without care risks shifting cities into ethnic enclaves,” while an authority keeps that “allocation follows legal procedures; any perception of impartiality stems from the historical settlement patterns, not policy.” These empirical results highlight systemic bias in the application of the legal framework.

The lease policy analysis demonstrates a critical gap: while Article 39 of the FDRE constitution focuses on collective ethnic rights, urban land policy remains silent on how to minimize discriminatory allocation, facilitating ethnic-political connections to grow unchecked. The cabinet’s mandate to define which are “strategic projects” and which are not exacerbates the patrimonial network and benefits elites disproportionately, not the poor.

Erdmann and Engel (2007), Bonga (2021), Lodge (2014), and Giraudy et al. (2020) theoretically note that in ethnic federal states, neo-patrimonial links often grow along ethnic spheres to gain rewards from elite decisions. The empirical work of this paper extends this claim by highlighting how the ethnic federal constitution interacts with urban land shortage to replicate ethnic boundaries spatially. This mix generates a unique neo-patrimonial order wherein formal ethnic line rights legitimize informal allocation cultures that might otherwise lack legal cover, depicting the adaptive nature of patronage logics within a mixed institutional structure.