The Ethiopian government recognized that economically empowered women would benefit national prosperity. In March 2001, the government joined forces with the World Bank, the Italian Cooperation, and other donors to implement the Ethiopian Women’s Development Initiatives Project (WDIP), a program which provides economic and social opportunities for women in low-income households.

The Women Development Initiative Project (WDIP) aimed to redress gender imbalances in development opportunities by investing in women's skills, productivity, and organizational capacity. The project encouraged women from low-income households to form women’s groups to coordinate their productive activities, such as grain and spice processing, handicraft production, and the rearing of animals and poultry.

Women’s groups were supported by a financial grant and by training in business skills. The time commitment expected from each of the participants is flexible enough to allow women to pursue their domestic responsibilities at the same time. Moreover, the groups often support each other in ways that allow them to earn income and still perform their household duties.

After a women’s group formed and selected its businesses, the women contributed 5 to 10 percent of the total funding needs from their own savings. They then presented themselves and their financial contribution to their local Regional Coordinating Unit (RCU) for more support. The RCU coordinated, monitored, and hired intermediaries to teach the women effective business operation skills.

Between 2000 and 2005, the WDIP supplied grants and training to 621 women’s cooperatives in rural and urban low-income areas in Ethiopia, benefitting 11,300 women and 60,000 direct family members.

The project components included a demand-driven fund that finances women’s group activities, such as grain and spice processing, handicraft production, and the rearing of animals and poultry; capacity building and training for women’s groups and other project stakeholders on organization, facilitation, project design, appraisal, and monitoring and evaluation; and information, education, and communication activities that enhance gender awareness.

The Women Development Initiatives Project (WDIP) helped women organize in groups and start small businesses to improve their socioeconomic outcomes. Random assignment into WDIP benefits during the early phases of the program provides an opportunity to measure the causal impact of WDIP on economic, social, and psychological outcomes using a survey of 1000 women three years into program implementation.

The impact evaluation finds that WDIP participants earned 100 birr more on average per month (about $11), compared to a valid control group. The additional income increased their household bargaining power, and specifically strengthened their ability to make decisions on household purchases.

As a result of participation in the WDIP, women are less likely to uphold traditional rules that constrain their participation in the workforce and freedom of movement. Yet, a reduction in household violence has not been observed, perhaps due to the countervailing effects of more income and independence and the stress that poses on traditional power relations in the household. With respect to mental health, the evaluation finds significant effects on happiness and reduced prevalence of depression symptoms, which cannot be explained by the increase in income alone.