1 Land Reform, Distribution of Land and Institutions in Rural Ethiopia: Analysis of Inequality with Dirty Data 1 Bereket Kebede School of Development Studies, University of East Anglia and Centre for the Study of African Economies, University of Oxford Abstract There are two either explicitly or implicitly and widely accepted ideas about the distribution of land in Ethiopia after the reform of 1975. First, land distribution in rural Ethiopia is highly equitable, for example compared to other African countries where private ownership exists. Second, the land distribution pattern currently observed is basically explained by what happened after the reform; hence, pre-reform tenures do not help us understand post-reform land distribution. This paper questions both these ideas. Using formal inequality indexes and a methodology that explicitly considers measurement errors, the empirical results indicate that both inter- and intra-regional inequalities are high; inequality in the distribution of land is as high as or even higher than other African countries. The paper also argues that the post-reform distribution is likely influenced by pre-reform distribution and calls for a more detailed historical analysis that attempts to understand the link between old tenure structures and land distribution after the land reform. 1. Introduction The dependence of a significant proportion of the world’s poor on the agricultural sector makes the distribution of land in rural areas an important issue for poverty alleviation. In particular, the access of low income rural households to adequate amount of land is crucial in sustaining their livelihoods. In recognition of this, many countries have undertaken land reform programmes to improve the access of households to land as well as decrease inequality in rural areas. The outcome of many land reform programmes was mixed. Ethiopia is one of the countries that undertook a land reform programme as part of a larger radical socio-political and economic revolution. In September 1974 Emperor Haile Selassie was overthrown in a military coup that brought an end to a very old dynasty that claimed to descend from the biblical King Solomon. The overthrow of the emperor was followed by a series of measures that changed the political and 1 This paper is part of an African Economic Research Consortium (AERC) project on ‘Poverty, Income Distribution and Labour Market Issues’. Comments of people attending seminars at the University of East Anglia, Goteborg University and the CSAE’s annual conference at Oxford University are really appreciated. As usual, the author is responsible to all interpretations and errors. CSAE WPS/2006-05