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Growth without Poverty Reduction? Examining Micro-Macro Links in Tanzania


  • Danielson, Anders

    (Department of Economics, Lund University)


Studying the relation between economic growth and income poverty reduction without taking changes in the distribution of income into consideration is like setting up Othello without Iago in the play. Without any further references to Shakespeare, this paper examines the relations between poverty levels, economic growth and changes in inequality in Tanzania during the 1990s. It offers four conclusions. First, the efficiency with which growth reduces poverty increases with a country’s income level, so low-income countries should combine growth promotion with redistribution; second, growth in Tanzania during the 1990s, has accelerated, but has also been concentrated in sectors to which the majority of the poor have few links; third, the efficiency with which income growth reduces poverty in Tanzania appears very sensitive to the pattern of growth; fourth, recent poverty reduction strategies do not appear to recognize this fact and rely apparently instead on a strategy in which growth increases tax revenue that can be used to alleviate poverty through an expansion of publicly supplied (social) services. The selected strategy appears particularly ill-chosen, both because of Tanzania’s historical tax collection record and because of the emerging consensus on the state as a facilitator, not a producer, in the development process.

Suggested Citation

  • Danielson, Anders, 2004. "Growth without Poverty Reduction? Examining Micro-Macro Links in Tanzania," Working Papers 2004:22, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2004_022

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    References listed on IDEAS

    1. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, March.
    2. Jordans, E. H. & Zwarteveen, M. Z., 1997. "A well of one's own: gender analysis of an irrigation program in Bangladesh," IWMI Books, Reports H020806, International Water Management Institute.
    3. Rosenzweig, Mark R, 1978. "Rural Wages, Labor Supply, and Land Reform: A Theoretical and Empirical Analysis," American Economic Review, American Economic Association, vol. 68(5), pages 847-861, December.
    4. Jordans, Eva H. & Zwarteveen, Margreet Z., 1997. "A well of one's own: gender analysis of an irrigation program in Bangladesh," IWMI Books, International Water Management Institute, number 113611.
    5. Bardhan, Pranab K, 1979. "Labor Supply Functions in a Poor Agrarian Economy," American Economic Review, American Economic Association, vol. 69(1), pages 73-83, March.
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    More about this item


    poverty; inequality; growth; Tanzania;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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