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Public investment and poverty reduction in Tanzania

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Author Info

  • Fan, Shenggen
  • Nyange, David
  • Rao, Neetha

Abstract

"Using Tanzania as a test case, this study demonstrates how household survey data can be used to assess the impacts of public investments on growth and poverty. A two step procedure is used. First, household survey data are used to link household welfare measures to human capital and household access to infrastructure and technology, while controlling for other community and household characteristics. The second step links household human capital and access to infrastructure and technology to past public investments in these factors. As in the Asian studies, the growth effects (measured as per capita income) of investments in agricultural research, roads, and education are found to be large. But unlike Asia, no clear distinction emerges between the measured impacts for high and low potential areas. In many high potential areas, returns to investments are still high and there is no sign of any diminishing marginal returns. This suggests that there has been insufficient public investment in all kinds of regions. Nevertheless, the results show that there is opportunity to improve on the growth and poverty impacts of total public investment through better regional targeting of specific types of investment. For example, additional investments in rural education have attractive growth and poverty impacts in all regions, whereas additional investments in roads and agricultural research are better spent in the central and southern regions of the country." Authors' Abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series DSGD discussion papers with number 18.

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Date of creation: 2005
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Handle: RePEc:fpr:dsgddp:18

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Related research

Keywords: Human capital ; Agricultural research Africa ; Public Expenditures; Investment; and Finance ; Infrastructures ; Welfare and Poverty ;

References

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  1. Demery, Lionel & Squire, Lyn, 1996. "Macroeconomic Adjustment and Poverty in Africa: An Emerging Picture," World Bank Research Observer, World Bank Group, vol. 11(1), pages 39-59, February.
  2. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
  3. Fan, Shenggen & Rao, Neetha, 2003. "Public spending in developing countries: trends, determination, and impact," EPTD discussion papers 99, International Food Policy Research Institute (IFPRI).
  4. Gupta, Sanjeev & Verhoeven, Marijn & Tiongson, Erwin R., 2002. "The effectiveness of government spending on education and health care in developing and transition economies," European Journal of Political Economy, Elsevier, vol. 18(4), pages 717-737, November.
  5. Lanjouw, Peter & Quizon, Jaime & Sparrow, Robert, 2001. "Non-agricultural earnings in peri-urban areas of Tanzania: evidence from household survey data," Food Policy, Elsevier, vol. 26(4), pages 385-403, August.
  6. Simler, Kenneth R. & Mukherjee, Sanjukta & Dava, Gabriel & Datt, Gaurav, 2003. "Rebuilding after war: micro-level determinants of poverty reduction in Mozambique," Research reports 132, International Food Policy Research Institute (IFPRI).
  7. Shenggen Fan & Xiaobo Zhang, 2008. "Public Expenditure, Growth and Poverty Reduction in Rural Uganda," African Development Review, African Development Bank, vol. 20(3), pages 466-496.
  8. Putterman, Louis, 1995. "Economic reform and smallholder agriculture in Tanzania: A discussion of recent market liberalization, road rehabilitation, and technology dissemination efforts," World Development, Elsevier, vol. 23(2), pages 311-326, February.
  9. Banister, Judith & Zhang, Xiaobo, 2005. "China, Economic Development and Mortality Decline," World Development, Elsevier, vol. 33(1), pages 21-41, January.
  10. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2000. "Growth and poverty in rural China: the role of public investments," EPTD discussion papers 66, International Food Policy Research Institute (IFPRI).
  11. Nkonya, Ephraim M. & Pender, John L. & Jagger, Pamela & Sserunkuuma, Dick & Kaizzi, Crammer & Ssali, Henry, 2004. "Strategies for sustainable land management and poverty reduction in Uganda:," Research reports 133, International Food Policy Research Institute (IFPRI).
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