The Constitutional and Legal Basis of Price Regulation in Ethiopia

This article examines price regulation with its various objectives, forms and contexts. Navigating through the economic literature (that shows price regulation as a futile exercise for controlling inflation and solving commodity scarcity), the article analyses the constitutional foundations and the legislative enactments that authorize price regulation in Ethiopia. While there is a strong legal authority under the Constitution to regulate prices, there is lack of detailed standards to distinguish between the proper and improper exercise of price regulation power. Distinction is made between price regulation in normal times vis-a-vis price regulation during emergencies, and I argue that price regulation during emergencies should be evaluated against separate standards. With regard to price regulation in normal times, the recently enacted administrative procedure proclamation may help in solving the lack of standards.