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

1. Introduction

Land serves as the foundation for urban existence and sustainable development (Home, 2021; OECD, 2017). Its effective management is critical in developing nations, where it remains a contested socioeconomic resource (Gemeda et al., 2021; Zhang & Kockelman, 2015). Historically, land ownership has been equated with freedom and power (Pirenne, 1937), shaping individual liberty and urban functionality (Aalbers & Haila, 2018; Foster & Warren, 2021). However, political dynamics often distort land governance, enabling elites to exploit resources for patronage rather than public welfare (Bryan et al., 2020; Milonakis & Fine, 2009). Misuse of scarce public resources like urban land has become ubiquitous in third world countries, particularly in Africa.

Neo-patrimonialism, widespread in developing economies, fuels these challenges by constraining resource allocation—including urban land—to political loyalty (Soest, 2021; Trantidis, 2016). While colonial legacies are often cited as a root cause, Ethiopia’s non-colonial history demonstrates that weak institutions and concentrated state power perpetuate such systems (Bach & Gazibo, 2012; Fukuyama, 2013, 2015). This paper examines how Ethiopia’s urban land lease policy, framed within state ownership, intersects with neo-patrimonial practices in Addis Ababa, a gap underexplored in existing studies (Beza, 2021; Davies, 2008; Rithmire, 2013).

Officeholders increasingly exploit urban land as an instrument for political patronage, distributing benefits derived from it to cultivate support (Bonga, 2021; Gray & Whitfield, 2014). Maintaining power within a neo-patrimonial system requires resources to ensure the loyalty of individuals and groups (Wolfe & Muller, 2018), and urban land, generating significant resources and revenue, becomes central to sustaining the political order. Consequently, urban land policy in the developing world reflects the neo-patrimonial political economy ingrained in its urban geography.

Urban land is land employed or planned to be used for urban functions. It encompasses not only the physical terrain designated for urban functions but also the structures and resources attached to it, such as buildings, vegetation, and subterranean assets (water, minerals, oil and so) (Hubacek & Bergh, 2002; Qadeer, 1981). Even vertical spaces in high-rise buildings qualify as urban land, reflecting its evolution from natural territory to constructed environments.

Historically, land ownership philosophies have shifted dramatically. In pre-modern societies, land was viewed as a communal resource, akin to natural phenomena like air or celestial bodies, with no individual claims (Aalbers & Haila, 2018; Haila, 2016). Feudalism introduced hierarchical ownership, where landlords extracted rent—in labor or produce—from tenants (Benditt, 2015). Capitalism later commodified land, enabling market transactions, while modern financialization transformed it into a tradable asset via title deeds and real estate markets, generating “derivative rents” (Haila, 2016). The certificate of ownership can be exchanged in the stock market like any asset. These transitions underscore land’s dual role as both a social foundation and an economic instrument.

To address the identified problem or gap, this study employed key informant interviews, policy document analysis, and a review of existing empirical literature.

2. Literature review

3. Methods and materials

The study employed key informant interviews, an analysis of lease policies, particularly Lease Proclamation No. 721/2011, and an extensive review of existing literature to examine how the neo-patrimonial political system interacts with state land ownership. Interviews were conducted with land officials, land experts, and representatives from Civil Society Organizations, involving a total of 17 participants. Oral consent was obtained from all interviewees, in line with common practice at the University. This approach was chosen to safeguard politicians and experts whose views may involve sensitive political issues, and to ensure practicality and efficiency, as it avoids the need to collect written signatures that may not be easily obtainable. The process of obtaining informed consent was reviewed and approved by the Institutional Review Board (IRB) of the College of Development Studies, Addis Ababa University (Reference No. 092/11/2024).

4. Results and discussion

Ethiopia formulated its first urban land lease law in 1993 under Proclamation No. 80/1993, marking a historic shift in land management (Weldesilassie & Gebrehiwot, 2017). Over time, this law was revised twice—through Proclamations 271/2002 and 721/2011—to address emerging socio-economic needs and governance gaps. The primary objective of these policies has been to promote equitable urban development by transferring state-owned land to tenants via transparent, accountable leasing mechanisms. By doing so, the government aimed to optimize land use efficiency and stimulate economic growth across cities.

Contrary to common perception, urban land leasing in Ethiopia predates Proclamation No. 80/1993. For instance, the 1960 Civil Code under the imperial regime included provisions (e.g., Article 2896 and following) regulating land leases between private individuals (Haimanot-Woldgbrial, 2009; Tefera-Beyera, 2017). However, unlike modern lease laws, these frameworks did not govern state-to-citizen transactions, leaving a legal void in public land administration until the post-1993 reforms ( Table 1).

Proclamation No. 80/1993, despite its pioneering role, faced criticism for limiting land transfers to tender-based modalities, excluding alternative approaches like allotment. To address these limitations, Proclamation 271/2002 introduced three transfer mechanisms: allotment, negotiation, and auction (Belete & Wudu, 2017). However, the negotiation clause inadvertently enabled corruption, as officials exploited loopholes to allocate land to bribing parties. Consequently, Proclamation 721/2011 eliminated negotiation, retaining only auction and allotment to curb malpractice and enhance transparency.

Despite the urban lease system’s stated goal of equitable land access, marginalized groups—particularly the poor—remain excluded (Digafe et al., 2023). In Addis Ababa, for example, corruption, inflated market-driven lease prices, and political favoritism disproportionately hinder low-income residents from securing land for housing or businesses (Weldesilassie & Gebrehiwot, 2017). Furthermore, speculators and brokers dominate tender processes, sidelining those without political connections—a stark contradiction of the policy’s equity objectives. Even Article 4(2) of Proclamation 721/2011, which mandates transparent tender operations, has failed to materialize in practice.

Faced with systemic barriers, many urban poor resort to informal settlements or squatting to access land (Belete, 2017; Y. Zhang et al., 2019). Compounding this issue, bureaucratic inefficiencies and underdeveloped infrastructure limit the supply of serviced land, creating a mismatch between demand and availability. This scarcity not only fuels informality but also stifles investment and urban development, as investors face prolonged delays—sometimes exceeding two years—to secure plots.

The preamble of Proclamation 721/2011 emphasizes “effective urban land governance” to advance communal interests and sustainable development. Specifically, Article 4(1) justifies leasing as a tool to balance public welfare with national progress, while Article 4(4) mandates equitable distribution aligned with urban planning goals. In theory, these provisions aim to harmonize individual, municipal, and national interests—yet their implementation remains fraught with challenges.

Under Article 5(1), urban land use rights are restricted to leaseholds, with limited exceptions for pre-existing holdings. Notably, Article 6(1) requires even these legacy holdings to convert to leaseholds, ensuring uniformity in land administration. Additionally, Article 5(4) grants regional cabinets authority to exempt certain cities from the proclamation for up to five years—a flexibility clause that risks inconsistent enforcement.

Article 8(1) outlines prerequisites for leasing land, including legal clarity, infrastructure readiness, and alignment with urban plans. Moreover, Article 8(2) mandates transparent tender processes to secure fair land prices. Meanwhile, Article 12(1) permits limited allotments for public institutions, housing programs, and strategic projects, with lease durations varying by land use—for example, 99 years for residential plots versus 15 years for urban agriculture.

To standardize pricing, Article 18 requires city administrations to set benchmark lease rates, updated biennially to reflect market shifts. Once approved, lessees must sign contracts specifying construction timelines, payment schedules, and obligations before receiving leasehold certificates. These measures, however, struggle to counterbalance systemic political interference in land allocation.

The broader legal framework, including Proclamation 721/2011 and the constitution, entrenches political control over urban land. As a result, city and regional cabinets—not independent bodies—oversee implementation, often prioritizing patronage over equity. This centralized control enables elites to weaponize land as a political tool, rewarding loyalists with housing, compensation, or commercial plots while excluding dissenting voices (Davies, 2008; Soest, 2021). Consequently, urban land becomes a “currency” in neo-patrimonial networks, perpetuating rent-seeking and consolidating ruling-party dominance.

The Ministry of Urban Development and Construction nominally oversees policy enforcement, yet Proclamation 721/2011 lacks mechanisms to ensure federal-regional alignment or accountability. This ambiguity allows regional authorities to bypass constitutional mandates, exacerbating disparities between federal cities (e.g., Addis Ababa) and regional hubs. Furthermore, bureaucratic delays, overlapping claims, and under-resourced land agencies undermine efficiency, deterring investors and prolonging disputes.

In theory, public land ownership should curb rent extraction and promote equity through value-capture mechanisms (Ryan-Collins et al., 2017). In practice, Ethiopia’s neo-patrimonial governance distorts this ideal, as officials exploit land for personal or political gain. Rather than serving communal interests, state-controlled leasing entrenches inequality, disproportionately benefiting connected elites while leaving the poor landless—a paradox that mirrors pre-reform injustices despite constitutional guarantees.

Qualitative data, vial key informant interview, among public officials, urban land experts, and experts from the Civil Society Organization, was collected and analyzed to add insight and strengthen the literature view and policy analysis. The data was collected from the 17 informants who work on urban land.

Table 1 clearly illustrates that a substantial majority of informants (88%, n = 15/17) describe state ownership of urban land significantly enhances the ability of land officials to influence allocation. This influence, they contend, is often wielded to benefit loyal and politically connected individuals, thereby disadvantaging the wider urban community. This perspective is exemplified by Land Expert A, who elaborates:

Neo-patrimonial systems enable elites to treat urban land as a political currency. In Ethiopia, Soest (2021) documents how lease negotiation modalities (pre-2011) allowed officials to extract bribes, diverting land from public to private interests. Similarly, Wolfe & Muller (2018) argue that urban land in neo-patrimonial regimes becomes a “rent competition arena,” where access depends on bribes rather than merit. Davies (2008) adds that land leases in Addis Ababa sustain patron-client networks, with loyalists receiving prime plots while marginalized groups face exclusion.

Haimanot-Woldgbrial (2009) traces this dynamic to weak institutional check, noting that Ethiopia’s lease proclamations (e.g., No. 721/2011) lack mechanisms to hold officials accountable. Ryan-Collins et al. (2017) theorize that state ownership, intended to curb rent-seeking, instead fuels it in neo-patrimonial contexts, as elites capture land value through informal deals.

Furthermore, the data shown in Table 1 confirms that a significant majority of informants (82%, n=14/17) explain the urban lease policy as granting top-level officials broad discretionary power, effectively excluding urban communities and experts from meaningful participation. This centralization of land allocation and management is further illuminated by the remarks of Official B:

This finding aligns with a robust body of empirical research (Belete & Wudu, 2017; Goodfellow, 2017; Rudel, 2013; Wolfe & Muller, 2018), which collectively underscores how neo-patrimonial governance structures distort urban land allocation processes. Under such systems, personalistic power supersedes formal institutional rules, creating a hierarchy where resource distribution—particularly urban land—is contingent on political loyalty rather than merit, equity, or transparent policy frameworks. At its core, neo-patrimonialism enables top-tier officials, such as city cabinet members or regional administrators, to wield near-absolute discretionary authority over land leases. These actors function as gatekeepers of urban land, determining not only who receives access but also how and when land benefits are dispensed.

For instance, Belete and Wudu (2017) demonstrate this dynamic in Ethiopia’s urban lease system, where politically connected individuals and entities consistently secure prime land through opaque negotiation processes, despite legal reforms aimed at promoting transparency. Similarly, Wolfe and Muller (2018) identify a pattern of “rent competition” in Sub-Saharan African cities, where land allocation becomes a transactional process: elites exchange leases for bribes, campaign support, or other forms of political patronage, effectively privatizing public land for personal or partisan gain. This clientelist logic, as Goodfellow (2017) observes in Kampala and Kigali, entrenches exclusionary practices, sidelining marginalized groups—such as low-income residents or informal traders—who lack the political networks to navigate bureaucratic gatekeepers.

The third key finding, as demonstrated in Table 1, highlights systemic disparities in urban land lease policy tied to ethnic alignment. Interview data reveal that 71% of respondents (12 of 17) affirmed the absence of institutional mechanisms to safeguard equitable land access and services for individuals across ethnic categories. This systemic gap exacerbates, reinforcing patronage networks that disproportionately favor individuals whose political affiliations align with official identities, while marginalizing others who don’t have political and ethnic linkage.

A Civil Society Organization Representative (C) contextualized this dynamic, noting:

These findings align with research from Kenya, Zimbabwe, and Cameroon, demonstrating that ethnic factors impede equitable access to urban land (Dafe, 2017; Gbaguidi, 2022; Majid & Memon, 2019; Ndi et al., 2021; Obala & Mattingly, 2014). These studies reveal that ethnic-based land allocation, political patronage intertwined with ethnicity, and ethnic networks all contribute to unequal access and perpetuate disadvantages for marginalized groups.

5. Conclusion

This analysis of the urban land lease policy in Addis Ababa highlights a fundamental conflict between its stated aim of promoting sustainable urban development and the practical outcomes shaped by a neo-patrimonial framework. Although state control over land is intended to curb private monopolies and advance public interests, it often enables authorities to favor political allies over broader societal needs, deepening inequities and obstructing effective resource (land) distribution. To address this discrepancy, future initiatives should prioritize structural reforms that distribute decision-making power, strengthen transparency and accountability mechanisms, and meaningfully involve underrepresented groups in land governance processes, paving the way for a more just and sustainable urban environment.

Ethical approval statement

On November 1, 2024, the Institutional Review Board (IRB) of the College of Development Studies, Addis Ababa University, granted ethical clearance for this study (Reference No. 092/11/2024). The approval was issued after the IRB reviewed and confirmed that the research complies with the University’s academic standards, including the study design, data collection instruments, content, and the process of obtaining informed consent from participants. The authors also confirm that this study was performed in accordance with the principles stated in the “Declaration of Helsinki”.