Economic impacts of expropriation on the affected households in Addis Ababa Kebena-Diaspora Square corridor development

Abstract

Addis Ababa is implementing urban corridor development projects, relying primarily on land expropriation as the key method for land acquisition. However, the economic impacts of expropriation for the corridor development were not examined thoroughly. Therefore, this paper examines the economic impacts of expropriation on affected people in the Kebena-Diaspora Corridor development project using Structural Equation Modeling (SEM). The findings indicate that a robust legal framework, effective expropriation procedures, adequate compensation, and active community engagement enhance the quality of expropriation, which in turn positively affects the expropriated households’ economic well-being of affected households. The economic well-being of affected households is reflected in factors such as household income, rising living costs, household expenditures, asset loss, relocation, loss of access to quality infrastructure, lack of access to public services, employment disruption, and increased household financial burden. The quality of expropriation practices acts as a mediating mechanism that strengthens the positive effects independent variables. Furthermore, the quality of expropriation practices acts as a mediating mechanism that strengthens the positive effects of the independent variables. Based on these findings, the paper recommends strengthening legal frameworks, standardizing expropriation procedures, reforming compensation systems, and improving the quality of community engagement to maximize economic benefits and protect the livelihoods of affected households.