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Is Tanzania a Success Story? A Long Term Analysis

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  • Sebastian Edwards

Abstract

The purpose of this paper is to provide a historical perspective on the reform process initiated in Tanzania in 1986, and deepened in 1996. In order to do this I concentrate mostly on the period spanning from 1967, when the Arusha Declaration was adopted by the official political party the TANU, and 1996, when a new approach towards foreign aid was implemented. I am particularly interested in investigating how external aid affected Tanzania during the early years, and how it contributed to the demise of the economy in the 1970s and 1980s. I also analyze the role played by foreign aid in the subsequent (after 1996) recovery of the country. I emphasize both technical as well as political economy issues related to imbalances, disequilibria, devaluation, black markets, adjustment, and reform. Because of the emphasis on foreign aid and macroeconomics, I pay special attention to three important episodes in Tanzania’s economic history: (a) the exchange rate crisis of the late 1970’s and early 1980s; (b) the IMF Stand-by Program and the maxi-devaluation of 1986; and (c) The serious impasse between donors and the Tanzanian authorities in the mid 1990s. At the end of the analysis I ask whether Tanzania is, as officials from the multilateral institutions have claimed repeatedly, a “success story.”

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17764.

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Date of creation: Jan 2012
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Publication status: Forthcoming: Is Tanzania a Success Story? A Long Term Analysis , Sebastian Edwards. in African Successes: Government and Institutions , Edwards, Johnson, and Weil. 2014
Handle: RePEc:nbr:nberwo:17764

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  1. Volker Treichel, 2005. "Tanzania's Growth Process and Success in Reducing Poverty," IMF Working Papers 05/35, International Monetary Fund.
  2. Lal, Deepak, 1987. "The Political Economy of Economic Liberalization," World Bank Economic Review, World Bank Group, World Bank Group, vol. 1(2), pages 273-99, January.
  3. Ndulu,Benno J. & O'Connell,Stephen A. & Bates,Robert H. & Collier,Paul & Soludo,Chukwuma C., 2009. "The Political Economy of Economic Growth in Africa, 1960–2000," Cambridge Books, Cambridge University Press, number 9780521127752, 9.
  4. Hyden, Goran & Karlstrom, Bo, 1993. "Structural adjustment as a policy process: The case of Tanzania," World Development, Elsevier, vol. 21(9), pages 1395-1404, September.
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Cited by:
  1. Hodler, Roland & Dreher, Axel, 2013. "Development (paradigm) failures," Journal of Development Economics, Elsevier, vol. 101(C), pages 63-74.

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