Economic Reforms and Structural Changes in Ethiopia since 1992; An Inquiry Prabhakar Reddy Tada Since the beginning of the nineties, Ethiopia has been experiencing significant political, economic and social changes. Despite the efforts of the Ethiopian government to strengthen market economy mechanisms and to decentralize and regionalize decision making structures, the country is still facing a number of problems such as poverty, soil degradation, regional conflicts etc. The elaboration of sound development strategies is essential to promote economic growth, and to alleviate poverty in the context of limited resources. In brief, the economy is undergoing the process of transformation in all most all the fields. In this context, the paper is an attempt to understand the process of transition and its implications in Ethiopian economy. The study focused the issues such as institutional development and socio economic changes that are taking place in Ethiopia since 1992 economic reforms. Furthermore, the study assessed the economic structural changes at national level as well as the strengths and weaknesses and elaborated regional and structural strategies for Ethiopia. Objective and Methodology a) The objective of the study was to assess the economic structural changes at national and regional level as well as the strengths and weaknesses of the regions and elaborate regional and structural strategies for Ethiopia. It also focused the issues such as the process of transition, institutional development and capacity building. b) Basically the study looked into the economic changes in Ethiopia since 1992 economic reforms. However, we considered the earlier period for understanding the historical aspects. However, the study period is from 1992 to 2000. c) The data and information for the study are going to be culled out from the secondary sources; however, we also concentrate on primary data wherever necessary to substantiate the argument. The data sources are Bureau of Planning and Economic Development, Central Statistical Authority and so on. Preliminary observations showed that the Ethiopia is a transitional economy, which is undergoing many changes since 1992. The year 1992 is an important year in the history of Ethiopia because it culminated with the introduction of economic reforms. Further, we strongly believe that the reforms implemented in any developing economy will have a direct bearing on the economic growth and reduction of poverty. However, the speed with which the reform process should proceed is a debatable issue as it is concerned with the economic performance of a country prior to the introduction of economic reforms. Program Coordinator, Centre for World Solidarity, 12-13-438, St. No.1, Tarnaka, Secunderabad. 500 017. A.P. IndiaThe transition from a planned economy to a market economy involves a complex process of institutional, structural and behavioral changes experienced by former socialist countries while moving along with transition to varying degrees (1). The intensity of reforms and the degree of liberalization vary from country to country and depends heavily on the structural, institutional and behavioral changes. Therefore, whether the rapid reform is preferable to slow reform is a question of policy matter and the concerned government should decide it. Considerable literature exists on the concepts of transition to decide which are the countries really experiencing the transformation process. Different people defined the transition in different ways. However, there is unanimity about its meaning and application. Let us review them here briefly. Transitional Economy A transitional economy is described by Walder, as the one in which the planned allocation of goods by government officials is replaced by allocation through direct bargaining between buyers and sellers or from a command to a market economy, this is being adopted in Central and Eastern European countries. Another description by Mundle says that the transitional economy is the “one where material production is still dominated by agriculture”, but in which the relative weight is shifting in favor of “ a substantial manufacturing sector”. Others also opined in the same way as Mundle and defined it as the transformation from a low-income agrarian to a high-income industrial economy, or a developing to a developed society (2). Further, the transitional economies represent many variations within each, and each may include a series of steps. These variations can reflect unique circumstances or they may embody situations for which there is a thorough historical record, such as the transition from subsistence to commercial agriculture. However, there is a different case wherein an economy may be moving simultaneously from agrarian to industrial, and from centrally planned to free market, as in the case of Ethiopia (3). Nevertheless, the general goals in all the transitional economies are to ”increase their productive capacity, change the structure of their economies, increase real per capita incomes, reduce poverty, and increase the health and education of the population”. Precisely, the transitional economy is the one, which is moving from socialist central planning to free market principles, which is being adopted in Africa and Asia. It is nothing but a sort of economic transformation wherein one is striving to achieve the most efficient and effective means of resource allocation through liberalization of the economy, privatization of public enterprises, and decentralization of the decision making process.It is not only an issue of transition, but also underdevelopment, missing markets and the interface between useful intervention by the state and liberalization. Since Ethiopia is a developing economy and identified with lower per capita income and low levels of saving and investment the useful intervention by the state is essential in order to realize the benefits of liberalization in all sectors of the economy. However, the role of the state should be confined to facilitate various market economy mechanisms and to enable the reform process to continue. Further, the priority