Household-level impacts of urban expansion planning: Evidence from Ethiopia’s urban expansion initiative

• Ethiopia's Urban Expansion Initiative (UEI) took a proactive approach to urban growth, deploying arterial road grids in peri-urban areas of 18 cities before informal settlement could take hold.
• A rigorous household-level evaluation across eight cities finds that the UEI raised annual household income by 7% to 14% and significantly improved residents' perceived economic well-being compared to a decade ago.
• The initiative expanded access to piped water by seven to eight percentage points and improved sanitation by 12 to 14 percentage points, and reduced travel times to city centres, clinics, and markets.
• Despite these gains, employment structures remain informal, and poverty rates show no significant decline, underscoring the need for complementary policies and a longer time horizon to convert infrastructure gains into structural gains.
• The initiative has reshaped local housing markets, with rising property values and rental demand along arterial corridors; proactive land governance is needed to ensure lower-income residents share in these gains.

The evidence shows that significant household-level benefits can be achieved through incremental infrastructure action – even in the absence of coordinated policymaking. This is a compelling argument for cities to act early on arterial road grids rather than delay until investment plans and policies are fully aligned. Cities that delay risk losing ground that is far more costly to recover later.