Ethiopia has adopted a system of devolution to local government, within a federal system, as a strategy to advance development and to manage the ethnic diversity of its people. Ethiopia's local governments, i.e. its woredas, kebeles and zones are posited as critical to achieving developmental ends and to accommodate the country's ethnic diversity. This book examines whether the institutional design underlying these local governments enables them to achieve these objectives. Based on international literature, the book identifies institutional features that are critical to enhance the potential of local government to advance development and accommodate ethnic minorities. In light of these institutional features the book presents a comprehensive description and analysis of the policies and laws surrounding local government in Ethiopia. It draws lessons, both negative and positive, relevant for other African countries with the same twin challenge of development and accommodating ethnic diversity.