Ethiopia’s experiment with the Developmental State Model within a context of a federal system has been the subject of debate among scholars and policymakers. This study examines whether and how the Developmental State Model has impacted the multilevel development governance system within the Ethiopian federation. It specifically aims to examine how the Developmental State Model has affected the democratic and federal aspects of development governance as provided under the 1995 Federal Constitution. Within this umbrella question, the study seeks to answer the following specific questions: (1) Are the Developmental State Model and a federal political system conceptually incompatible? (2) What are the major issues of (in)compatibility and questions between the Developmental State Model vis-à -vis Ethiopia’s federal system? (3) What are the manifestations of, if any, authoritarianism under the Ethiopian Developmental State Model and the implications thereof on a democratic multilevel development governance system within the Ethiopian federation? (4) How have the federal government’s development policies under the Ethiopian Developmental State Model impacted the vertical division of power between tiers of government, as outlined under the 1995 Constitution? The study employed a qualitative research methodology, where large scale commercial farming, industrial parks, and rural-urban integrated master plan were purposively selected as cases for the study representing the three core sectoral policy areas of the Ethiopian developmental state (i.e. agriculture, industry, and urban development). Likewise, participants were selected purposively and data were gathered using in-depth interviews and focus group discussions with key informants, and review of pertinent documents, including policies, plans, constitutions, proclamations, regulations, party documents. both at federal and regional state levels. The findings of the study is that although the Developmental State Model tends to favor centralized state structure and authoritarian governance system, these nevertheless are not the inherent features of the model, and the model in and of itself is not necessarily incompatible with a federal political system, as the experiences of countries like India and South Africa, which managed to build a democratic developmental state under a decentralized state structure, clearly demonstrate. However, regarding Ethiopia’s experience, the study shows that the fact that the country’s federal system is organized along ethnic lines along the prominence of hegemonic party politics practiced by the EPRDF poses a serious compatibility dilemma for harmonious co-existence of the Developmental State Model with the federal system in Ethiopia. Under the Ethiopian Developmental State Model, the EPRDF-led government sought to entrench developmentalism as a hegemonic ideology that governs the country’s political economy by introducing a variety of measures and legislations (press and media, electoral, civil society, and anti-terrorism laws). These measures have significantly contributed to a shrinking of the democratic space and political pluralism in the country by undermining a decentralized and democratic development governance, as reflected in the top-down, exclusionary and coercive development policies witnessed, for example, in the case of thernrnIntegrated Master Plan for Addis Ababa City and the surrounding areas of the Oromia Regional State. Some of the development policies such as policies on large-scale farming and industrial parks development projects also saw an encroachment of the prerogatives of regional states by the federal government, highlighting how the Ethiopian Developmental State Model has undermined the country’s federal system, which provides for a democratic, decentralized development governance system, as enshrined under the 1995 Federal Constitution. This has had far-reaching repercussions and a significant contribution to political developments witnessed recently in Ethiopia, particularly between 2015 and 2018, where perennial mass protests and political crises that have gripped the country, as well as other important political developments that have been unfolding ever since that would be quite instrumental in shaping the country’s political future.