During its thirteen-year existence (1974 to 1987), the Derg worked to spread administrative reform down to the lowest echelons of regional administration. To this end, it took several important steps in 1975.

With its Land Reform Proclamation in March 1975, the Derg abolished the lowest level of rural administration, the balabat , and called for the formation of peasant associations that would be responsible for the implementation and enforcement of the land reform measures. Later in the year, the Derg issued Proclamation No. 71, which gave peasant associations legal status and authorized them to create "conditions facilitating the complete destruction of the feudal order." It also empowered the associations' executive committees to draft internal regulations that would, in theory, devolve more power to local communities. These associations were to be guided initially by students in the Development Through Cooperation Campaign (commonly referred to as zemecha), who were expected to teach peasants about the revolution's goals. Students were also supposed to help local communities plan and implement development programs in their areas.

Initially, it was not clear how much power, authority, or autonomy the regime intended to devolve to local institutions. Consequently, state agents often came into conflict with local organizations under the guidance of students who were often more radical and politically astute than government functionaries. By 1976, to bring local communities under tighter central control, the Derg introduced laws spelling out the rights and obligations of peasant associations and kebeles.

To the extent that peasant associations maintained some of their initial autonomy, they did so almost exclusively with regard to local issues. On national issues, the regime, through the party and other agencies, manipulated peasant associations to suit its purposes. After 1978, for example, production cadres and political cadres of the National Revolutionary Development Campaign (and later the WPE) played important roles in motivating peasant production and in political indoctrination. State control of local associations was also a natural by-product of the villagization and resettlement programs of the mid- to late 1980s.

By 1990 there were more than 20,000 peasant associations throughout the country. They represented the lowest level of government administration and, in collaboration with the local WPE office, were responsible for processing and interpreting national policies, maintaining law and order, and planning and implementing certain local development policies. State control grew further in 1975 when the Derg promoted the formation of the All-Ethiopia Peasants' Association (AEPA), a national association having district offices responsible for overseeing the activities of local associations. Before the WPE's formation, AEPA district representatives exercised supervisory powers over the associations under their jurisdiction. The management of elections, investigations into allegations of mismanagement, changes to association boundaries, and organization of political meetings all came under the purview of the AEPA district representative. However, by 1989 WPE cadres were active in monitoring and providing guidance to local peasant associations.

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Source: U.S. Library of Congress