Meine Pieter van Dijk

Forty private companies involved in solid waste collection (SWC) in five Ethiopian cities were studied to identify
key factors affecting their service performance. Investments, operational management capability and regulation are
the factors investigated. The major determinants of SWC according to a regression analysis are number and carrying
capacity of vehicles, distance from disposal sites and (unobserved) city characteristics. Route planning and a more
flexible contract substantially increase collection. Investments in SWC depend on access to capital by the private
companies. Different experiences of regulation (scope of contract) on SWC have been noticed. Service contract
arrangements are impediments in Mekelle. While, service zoning allows competition in Addis Ababa, Hawasa and
Bahir Dar. Rectifying the challenging nature of the contracts for private sector involvement (PSI) in SWC is vital
so that the cities with large heaps of solid waste left uncollected become clean. The study findings suggest that
for a number of reasons the Ethiopian government needs to entrust private companies with opportunities for more
meaningful and sustainable involvement in SWC. We recommend that the contract shall also have conditions
concerning sustainability.

This paper shows who the poor are in the slums of Accra and what kind of institutional arrangements they have to obtain drinking water and to solve their sanitary problems. The two most promising options were collaboration with the utility, which would provide standpipes or engage with private suppliers. We will analyse these options in more detail to show that they are serving the poor and can be benchmarked. That could lead to a situation where the achievements would be measured regularly and would imply that an increasing number of poor would be served, while the quality and price of the drinking water would be assured at a certain level. Similar arrangements are possible for the sanitation sector, where the Accra Metropolitan Authority is the responsible organisation.

A dedicated benchmarking system to assess the availability of
water supply and sanitation services for the urban poor will be explained. These services require the involvement of the utility and a host of other stakeholders, such as national and local government, a regulator, NGOs or CBOs and the slum dwellers themselves. Distributional justice arguments can
be used to justify the development of systems for providing to the poor. The dedicated system covers both drinking water supply and sanitation, and emphasises and assesses the involvement and contributions by all stakeholders. It considers piped and non-piped drinking water and sanitation solutions, the mix of which often characterises the reality in the slums and the urban periphery of Third World countries. The lessons from the PROBE research project on this topic will be summarised. These comprise the need for the right
policy and institutional environment, the provision of financial and other incentives to reach the poor, the involvement and collaboration of multiple stakeholders in mobilising the local resources, and the availability of a set of organisational, financial and technical tools with the concerned utility. When all these requirements are fulfilled there is a good chance to achieve the MDGs and SDGs in water and sanitation.

This paper is based on research in Chinese cities. It addresses the issues related to urban environmental performance and sustainability in emerging Chinese cities. The result shows that: (1) To basically control the degradation of urban environment the minimum per capita GDP should be about 1000 USD in China. This amount is only one third of that in the developed world; (2) The average share in GDP necessary for environmental investments is 2.9%. Such an amount would help to avoid further urban environmental degradation in Chinese big cities. 1.7% of GDP would be necessary for medium-sized cities. These environmental
investments will have a positive impact on local economic growth and social progress; (3) Cities are in different stages from non-sustainability to sustainability, and the major
characteristics of cities in these different stages will be presented in this paper; (4) It is obvious that significant differences in urban environmental management exist in cities that were  identified and which are at different stages of urban sustainability; (5) Directions for improving urban environmental management and sustainability in China will be recommended.

Ethiopian cities play an increasingly important role in economic development, both in creating value added per person and in providing a better quality of life. However, a large part of the city – the informal sector – performs much worse. This paper assesses the state of informality in Addis Ababa based on a broad definition, considering informal businesses, employment, housing, land services. We conclude that all households take part in informality as consumers and/or producers, with very high levels of informality in employment, services, land and housing. Informal businesses contribute 26% of urban employment, with relatively low and decreasing value added per person. The informal sector comprises those in exclusionary informality – where the poor resort to informality as a last resort – and those in voluntary informality – where businesses and households opt for informality based on a cost-benefit analysis. Most informality in Addis Ababa is exclusionary. The small group of businesses and households that are voluntary experience both benefits and costs. With most informality being exclusionary, formalization will not free up hidden reserves and boost the economy. As informal businesses offer services that the government can not deliver, we discuss incorporating informality into the fabric of the city. Instead of ignoring or controlling informality, formal institutions can work with informal land speculators and businesses – whom have proven to be successful – in offering services and infrastructure.

With the demographic-political balance tipping in favour of urban water consumers rural-urban competition for water will increase; some have even predicted that strong political economy considerations will lower future agriculture water allocations on account of rising demand for high value urban water supply. With an increase in diversion of water towards water supply one can expect a concomitant increase in urban wastewater generation. Urbanization is known to spur land modification in the form of conversion of common land to human settlements. This factor combined with gradient dynamics can alter the intensity and direction of water flows in urban areas and lead to public health risks like mosquito breeding. This paper reports on findings of a secondary data review of 121 towns in India and a case study of a town in the 0.2 to 0.5 million population category to explore policy and technical options that facilitate effective collection, treatment and reuse of domestic wastewater in the context of growing evidence of both temperature and rainfall variability and deteriorating water supply and sanitation services in peri-urban regions.

Global value chains are about linking local producers from developing countries to international markets. They link the raw-material producer and the final consumer. Which organizations are involved in this process and how important are they? Countries, China for example, are trying to climb the value chain. This is also what “upgrading value chains” is all about and in this book seven case studies of developing local and global value chains are presented from that angle. The book provides a combination of theoretical and empirical studies, which may inspire other researchers to develop more case studies in this important field of research, using the theoretical insights presented in the different chapters.1 We start with two theoretical chapters concerning global value chains, besides this introductory chapter and finish with a case of learning from a local value chain.

The discussion about privatization of urban services often focuses on the involvement of
foreign enterprises. This contribution deals with micro-privatization, the partial transfer of
government responsibility for solid waste collection (so important for the quality of water)
to micro-enterprises. What are some of the factors contributing to its results in Addis
Ababa, the capital of Ethiopia?

The potato offers a good alternative for diversification from maize, the staple food in Kenya. This article presents the results of a study on the potato marketing system, the factors affecting prices and the predominant governance system impacting on the market. Survey data were collected from 402 farmers in the three potato growing regions and addition information on monthly prices in major markets was provided the Ministry of Agriculture. There were also semi-structured interviews with the major actors in the potato sector. Potato marketing exhibits the captive governance structure with traders collaboratively acting as the lead firm. An analysis of the split in selling price between the various players indicates that margins were concentrated at the coordination of marketing activities as opposed to the production activities. Coordination activities took about 40% of the consumer price. Besides the market channel used, the production region, the size of the land cultivated and the yields obtained determined the price obtained by the farmers. Given the distribution of the value added in the chain and the current dominance of traders, we argue in favour of upgrading the value chain and giving more power to the farmers and their organizations.

Following the global trend of urbanization, Russian cities continue to grow by inclusion of nearby territories into cities’ borders. This implies corresponding expansion of drinking water supply and sanitation services to the newly urbanized areas. In most of the Russian municipalities WATSAN services are provided by public utilities. Due to chronic underfinancing these utilities operate the worn-out and obsolete centralized infrastructure with overloaded wastewater treatment plants, especially in smaller cities. Thus, for new urban areas it is often problematic to connect to the centralized sewerage systems, which hampers urban development. Here the issue of decentralization of WATSAN infrastructure arises, offering planners social and environmental benefits, but implying higher investment and O&M costs.
A comparative financial and economic analyses of centralized and decentralized sanitation options for the new districts of Obninsk are conducted at smaller and larger scales: 180-200 and 21000 inhabitants. The NPV method is used for cost-benefit analysis, sensitivity analysis is used to evaluate influence of external uncertain factors (demographic, economic and financial) on the financial and the economic NPVs of these projects. Based on results of the CBA and on interviews with stakeholders broader conclusions are made on centralized vs. decentralized sanitation for urban development projects of different scale.

Given that climate change is likely to exacerbate drought in certain parts of the world, a critical issue is how appropriate context-relevant drought policy can be crafted. This paper examines how China is developing policies to rural people to
cope with drought disaster. Based on content analysis of relevant policies from governance perspective, the paper concludes that the complex governance structure shows that (a) drought policies include general climate change policies, drought relief policies and adaptive policies; (b) there is a shift from hierarchical line management to co-management at national level; (c) policy incentives are mostly regulatory, economic, or both; (d) drought management paradigm is still disaster management rather than risk management; (e)with retreat of governmental organizations from local level, grass
root organizations become more important in policy implementation; and (f) adopting market mechanisms
and involving stakeholders are obvious trends in
drought policies, but which are still in nascent stage.

Can cities become engines of economic growth and models of democracy and inclusiveness, with healthy and sustainable living environments, like Ethiopia aims to achieve, or are the challenges associated with rapid urbanisation too overwhelming? (Ministry of Federal Affairs 2005; Ministry of Works and Urban Development 2006) This book assesses the opportunities and challenges of Ethiopian urban managers in an era of rapid urbanisation. It is based on a conference that took place at the Ethiopia Civil Service College in Addis Ababa on September 5th, 2007. During the conference, researchers from Ethiopia, Kenya, Zimbabwe, Ghana, Cameroon, Nigeria and The Netherlands offered their perspectives.

After the introduction there are 5 parts. In part II, political decentralization, Kassa Teshager (ECSC) has looked at political decentralization and assesses how it has been legally designed, implemented and how successful it has been in achieving the intended objectives of being an instrument of facilitating service delivery and promoting participation of grass-roots people in the decision-making processes. He gives a working definition of political decentralization and assesses the constitutional and legal framework of political decentralization. In this chapter he also examines the level of decision making autonomy of local governments; the participation of citizens in different decision making activities; and inter-governmental relations for improved decentralized service delivery.
The chapter is based on experiences with political decentralization experiences in Addis Ababa city. The study analyzes the constitution and the various policies formulated for the formal transfer of powers and responsibilities from the central government to Addis Ababa city, sub city and kebele levels of administration. Teshager points out that in practice, there have been very little devolution of authority and functions from city government to sub city and kebele levels. The structure is characterized by top-down approach of control and supervision. The representation of different segments of people and organizations of civil society in governments is extremely low. There is no consultation and citizen input in deriving development plans, projects and goals. Therefore, there is a need to revise the political decentralization policy and focus on its practical implementation which is responsive to the needs of local community
In part III administrative decentralization: Frew Mengistu and Meine Pieter van Dijk argue that Public Private Partnerships (PPP) are an attempt to transfer management to a combination of government and provide parties. Taking the Merkato Millennium Development Partnership (MMDP) as a case, this chapter analyzes the challenges in public private partnerships for urban re/development projects. The theoretical framework is composed of strategic and behavioural factors embedded within the specific local context. The strategic level factors include: vision/goal, strategies, leadership, political and societal support, and communication. The behavioural interaction level factors include trust, power balance and positions, mutual respect, perceptions, commitment and interaction rules. Both groups of factors are interdependent and closely related to the principles of good governance. These process variables were contrasted to the goal achievements or performance outcomes of the partnerships. The chapter shows that in order to use Public Private Partnerships effectively two conditions are necessary: a meaningful decentralization which empowers urban local governments with enough political space to influence policies to promote local development, and a higher level of political support. The Merkato Millennium Development PPP was lacking these conditions. The other challenges of the partnership had been managing too many stakeholders with different organizational values and expectations, and lack of clear demarcation of roles. The partnership also suffered from generic challenges of public private partnerships which are lack of clear accountability and identity.
In part IV, fiscal decentralization, Belay File and Ayele Mulugeta note that fiscal decentralization is often considered the manifestation of other types of decentralization. Fiscal decentralization involves the devolution of both revenue generation and expenditure management power to the lower levels of government. Devolving such a power would result in efficient and effective utilization of scarce resources. However, implementation of such systems varies among regions due to factors such as implementation capacity, the tax base, and level of economic development. The purpose of this chapter is to investigate the practices of fiscal decentralization in Addis Ababa City and to analyze the opportunities and challenges of the city administration in raising sufficient revenue and delivering public services to satisfy the needs of its citizens.
Aloys Bongwa looks at the formula for fiscal decentralization in Ethiopia and suggests several alternatives. He addresses the issue of measuring fiscal imbalances in transitional and developing economies and in particular in Ethiopia. Fiscal imbalance indicators are of special interest in transitional and developing economies, where peculiar developments question the validity of conventional indicators. This chapter discusses different approaches to fiscal imbalance measurement. Based on a review of fiscal policies in Ethiopia, and explains why the fiscal imbalances are an important phenomena that needs to be monitored and hence the imbalances have to be measured, which can be done in different ways. The author suggests using the net worth of government which gives a specific insight. What mechanisms do federations need to deal with fiscal imbalances between governments? The results show that fiscal imbalances in Ethiopia were much larger between 1998-2004 than conventional indicators suggest.
In part V an example of sectoral examples of decentralization housing has been reviewed. Tilhun Fekade chapter is about decentralization and cooperative housing. Housing cooperatives can play an important role in housing provision as
Decentralization and service delivery in Ethiopia
9
emphasized by enabling strategies promoted by the United Nations Centre of Human Settlements (UNCHS). The adoption of decentralization policies in Ethiopia that followed the change of government in 1991 led to a redefinition of the legal and institutional framework and hence the support available to the cooperatives. This study was therefore undertaken with the aim of exploring the impacts of decentralization on the performance of housing cooperatives in Oromia Region. The chapter is based on an extensive literature review and was supplemented by interviews held with relevant resource persons. The chapter’s major finding is that, despite changes in the legal and institutional frameworks for cooperatives that were adopted at the national level, the role of housing cooperatives in Oromia Region has been limited due to long years of policy neglect of the housing sector as well as failure to create adequate capacity to promote, support and regulate housing cooperatives. The chapter further highlights the lack of institutional alignment between the activities of institutions responsible for housing and cooperative sectors that have deprived housing cooperatives from obtaining support that are responsive to their specific demands. The study also revealed that, as things stand now, the role of cooperatives has been apparently downplayed in favour of a basically government-driven condominium housing construction program. The study forwards recommendations to be taken up in future efforts that aim to come up with

The book commences with an introduction, which contains the history of the informal sector and the conceptualization by sketching a number of theoretical developments. The information clearly elucidates ‘how to’ and ‘why to’ incorporate informality as a rational strategy of local and national governments in a situation where they cannot create enough employment, nor provide the necessary services.
Part I of the book deals with the informal urban economy. It reflects on the performance of informal small-scale businesses in urban Ethiopia based on productivity levels and employment creation. ‘Informal’ businesses are defined as illegal, unlicensed businesses which do not keep books of account and ‘small-scale’ as businesses and cooperatives with fewer than ten employees. Although this sector employs the great majority of the labour force, it is only recently that policy interventions have been initiated towards developing the sector through programmes such as micro- and small-scale enterprise development. The role small and medium enterprises play in the process of economic development is now widely acknowledged. However, successful interventions require good information on the nature and characteristics of informality in the country. Part I of the book tries to fill this gap.
Part II is about informality in urban land and housing. It clearly explains Ethiopia’s fast urbanization and its impact on urban centres in making informal settlements. The section compares the importance of land for economic and urban development in Ethiopia and China, where land is owned by the government. It elucidates land issues in both countries and the existence of informal land markets and transactions. Based on case studies of urban centres in Ethiopia, this section of the book explains the reality of a wide spectrum of informality where urban housing and land connect with regard to access to land. The section also goes beyond the spatial and physical aspects of informality and gives insights from the institutional economic paradigm, providing an alternative perspective to the analysis of informal settlements.
Part III reflects on informal access to services in urban Ethiopia. Basically the solid waste management and access to credit facilities have been addressed in this part. The idea is to make credit available through more freely accessible credit schemes or institutions in the hope that the poor will be able to use it to establish, grow and improve their ability to generate income. There is also the hope that it could promote employment opportunities.
The conclusions and recommendations of the book sum up the findings of all its three parts. Quite simply, informality, in terms of urban economy, urban land and housing, and urban services, is a highly complex entity covering broad aspects of economic and social activity. On one hand, understanding the informality in terms of its causes and consequences is not an easy undertaking. On the other, provision of effective policy solutions is intricate. There is an increasing recognition of the untapped potential of the informal economy and there is an increased focus by policymakers on tackling its root causes, promoting policies that provide the necessary conditions to encourage people to shift to the formal economy and to establish an environment which would enable the growth of enterprises. In parallel, efforts to achieve this shift should not result in the damaging or affect the continuation of existing informality.