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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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  • Sebastian Edwards, 2012. "Is Tanzania a Success Story? A Long Term Analysis," NBER Working Papers 17764, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17764 Note: IFM
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    References listed on IDEAS

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    1. 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, December.
    2. Lal, Deepak, 1987. "The Political Economy of Economic Liberalization," World Bank Economic Review, World Bank Group, vol. 1(2), pages 273-299, January.
    3. Volker Treichel, 2005. "Tanzania’s Growth Process and Success in Reducing Poverty," IMF Working Papers 05/35, International Monetary Fund.
    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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    1. repec:eee:socmed:v:187:y:2017:i:c:p:217-224 is not listed on IDEAS
    2. Hodler, Roland & Dreher, Axel, 2013. "Development (paradigm) failures," Journal of Development Economics, Elsevier, pages 63-74.
    3. Hodler, Roland & Dreher, Axel, 2013. "Development (paradigm) failures," Journal of Development Economics, Elsevier, pages 63-74.

    More about this item

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • G01 - Financial Economics - - General - - - Financial Crises
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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