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Improving Trade and Transport Services in Tanzania: A General Equilibrium Approach


  • Elina Eskola

    (Department of Economics, University of Copenhagen)


The study uses a computable general equilibrium (CGE) approach to simulate the welfare gains of improving trade and transport services in Tanzania up to the year 2015. The model takes into account the regional differences in trading margins and the different production patterns of commercial and subsistence producers. The results show that substantial economic growth can be achieved by alleviating the existing bottle necks in marketing. The regional growth patterns of production after market improvement favour the more isolated and often poorer regions, leading to decreased regional inequality over time. The main beneficiaries of the policy change are the rural poor whose income grows faster than the income of the wealthier urban dwellers. The results suggest, that if sufficient resources and political commitment to improving trade and transport sectors can be mobilised, the economic performance can be enhanced to reach the Millennium Development Goals by 2015.

Suggested Citation

  • Elina Eskola, "undated". "Improving Trade and Transport Services in Tanzania: A General Equilibrium Approach," Discussion Papers 05-22, University of Copenhagen. Department of Economics, revised Nov 2005.
  • Handle: RePEc:kud:kuiedp:0522

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    References listed on IDEAS

    1. Winter-Nelson, Alex & Temu, Anna, 2002. "Institutional Adjustment and Transaction Costs: Product and Inputs Markets in the Tanzanian Coffee System," World Development, Elsevier, vol. 30(4), pages 561-574, April.
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    Cited by:

    1. Briones, Roehlano M., 2009. "Impact Assessment of National and Regional Policies Using the Philippine Regional General Equilibrium Model (PRGEM)," Discussion Papers DP 2009-03, Philippine Institute for Development Studies.

    More about this item


    computable general equilibrium (CGE); regional growth; commercialisation; infrastructure; trade; pro-poor growth; Tanzania; millennium development goals;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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