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Rural-Urban Linkages, Public Investment and Transport Costs: The Case of Tanzania

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  • Christopher Adam
  • David Bevan
  • Douglas Gollin

Abstract

We develop a multi-sector spatial applied general equilibrium model calibrated to the 2001 Tanzanian Social Accounting Matrix to examine the impact of public investment on household welfare. We examine how different public investment packages combined with reforms in the transport sector alter the equilibrium structure and location of economic activity. The choice of financing arrangements also matters for welfare, since tax incidence, relative price and real exchange rate movements are non-neutral. We also note that welfare gains are generated by the movement of rural workers out of quasi-subsistence agriculture into higher-productivity jobs in other sectors and locations.

Suggested Citation

  • Christopher Adam & David Bevan & Douglas Gollin, 2016. "Rural-Urban Linkages, Public Investment and Transport Costs: The Case of Tanzania," CSAE Working Paper Series 2016-01, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2016-01
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    2. Krishnan, Pramila & Zhang, Peng, 2020. "Restricting trade and reducing variety: Evidence from Ethiopia," World Development, Elsevier, vol. 126(C).
    3. Porteous, Obie, 2022. "Reverse Dutch disease with trade costs: Prospects for agriculture in Africa's oil-rich economies," Journal of International Economics, Elsevier, vol. 138(C).
    4. Dorosh, Paul & Thurlow, James, 2018. "Beyond Agriculture Versus Non-Agriculture: Decomposing Sectoral Growth–Poverty Linkages in Five African Countries," World Development, Elsevier, vol. 109(C), pages 440-451.
    5. Remi Jedwab & Adam Storeygard, 2019. "Economic and Political Factors in Infrastructure Investment: Evidence from Railroads and Roads in Africa 1960–2015," Economic History of Developing Regions, Taylor & Francis Journals, vol. 34(2), pages 156-208, May.
    6. Jan Willem Gunning & Pramila Krishnan & Andualem T. Mengistu, 2024. "Fading choice: transport costs and variety in consumer goods," Economica, London School of Economics and Political Science, vol. 91(363), pages 1100-1123, July.
    7. Maxwell Mkondiwa & Jeffrey Apland, 2022. "Inter-district food flows in Malawi," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(6), pages 1553-1568, December.
    8. Albert Novas Somanje & Geetha Mohan & Julia Lopes & Adelina Mensah & Christopher Gordon & Xin Zhou & Mustafa Moinuddin & Osamu Saito & Kazuhiko Takeuchi, 2020. "Challenges and Potential Solutions for Sustainable Urban-Rural Linkages in a Ghanaian Context," Sustainability, MDPI, vol. 12(2), pages 1-19, January.
    9. Jose Cuesta & Mario Negre & Ana Revenga & Maika Schmidt, 2018. "Tackling Income Inequality: What Works and Why?," Journal of Income Distribution, Ad libros publications inc., vol. 26(1), pages 1-48, March.

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