The dynamics of trade liberalization, export performance, and economic growth in Tanzania: a time series analysis 1980–2020

Trade liberalization plays a key role in enhancing export performance and promoting economic development by expanding market access and improving competitiveness. However, despite its potential, trade liberalization has not progressed smoothly in developing countries, often hindered by challenges such as weak governance, economic constraints, and inadequate institutional support. Therefore, this study explores the relationship between trade liberalization, export performance, and economic growth in Tanzania, using data from 1980 to 2020. Employing a time series design and the Autoregressive Distributed Lag (ARDL) model, the findings reveal a significant positive correlation between trade liberalization and export performance, indicating that a more open economy is associated with a stronger export sector. Furthermore, exports significantly contribute to economic growth, underscoring their role as a key driver of sustained development. Additionally, governance quality, private sector size, and the time required to start a business emerge as critical factors affecting both export performance and economic growth. Based on these insights, the study recommends strategic measures such as trade promotion, further liberalization, governance reforms, and private sector support. Streamlining business procedures to improve the ease of doing business is also highlighted as essential for fostering economic growth. Implementing these policy measures can help Tanzania and other developing nations unlock their export potential, attract investment, and promote inclusive and sustainable growth.