The Impact of the Urban Local Government Development Program on Service Delivery and Household Livelihoods: Evidence from Selected Small Towns in the Amhara Region, Ethiopia

Abstract

For Ethiopia, creating jobs and fostering economic growth in urban areas are top priorities. Thus, the GoE established the ULGDP to enable cities to realize their full potential for service delivery and job creation. However, little is known about the program effect. Considering this, the purpose of this study is to determine the effect of urban local government development program on enhancing service delivery and household livelihoods. To determine the project impact, the study analyses the results between local governments involved in projects and those who are not (using the propensity score matching methodology). Consequently, the descriptive analysis shows that, with an average score of 2.5 out of 5, ULGs demonstrate fair levels of urban services in terms of efficient function allocation, local control over administration and service delivery, and local financial autonomy and management. However, they tend to lack meaningful and effective political leadership. The analysis further shows that the program, funded by ULGDP, created 1684 jobs in Program City (Motta), with a sizeable portion of women and unskilled labour. The results from econometrics analysis also find that the livelihoods asset capital index of project ULG households was found to have increased positively and significantly because of the program. The livelihood assets index mean difference between ULG households in projects and those in non-projects, based on propensity score, ranges from 11% to 19% after matching. It is, therefore, recommended that scaling up be put in place to assist non-supported ULGs.