Aid and Reform in Tanzania: World Bank report

Contributor

Apr 02, 2001

The purpose of the paper is to understand the causes of policy reform in Tanzania. It covers the time period from the beginning of the severe economic crisis in Tanzania in 1979 up to the present, but to put this in perspective it also briefly outlines the policies pursued before that. The study investigates how aid has encouraged, generated, influenced, supported or even retarded reforms.

Arne Bigsten
Deogratias Mutalemwa
Yvonne Tsikata
Samuel Wangwe

The purpose of the paper is to understand the causes
of policy reform in Tanzania. It covers the time
period from the beginning of the severe economic
crisis in Tanzania in 1979 up to the present, but to
put this in perspective it also briefly outlines the
policies pursued before that. The study investigates
how aid has encouraged, generated, influenced,
supported or even retarded reforms. The main aim is
thus to analyse the reform process and not the results
of the reform. The specific questions discussed are:

1. What caused the reforms?
2. Who was responsible for the reform and who were the
main actors behind the reform?
3. What decisions were taken?
4. How were the reform decisions affected by aid?
5. Has aid helped sustain reforms?

First, the paper examines the different types of aid
the country receives. Then it describes changes in
economic policy and institutional framework and
analyses the causes and implementation of the
identified policy reforms as well as the internal
dialogue and involvement of different actors. The
impact of reforms on growth is also briefly discussed.
Five phases in the evolution of reform in Tanzania are
identified. The first period 1979–1982 is
characterised as a stalemate. This is followed by a
period of hard internal debate 1983–1985 leading up to
a period of initial reform and aid boom. Then in
1993–1995 the country is again off the reform-track,
until it gets back on track again from 1996. Finally,
an assessment is made of the links between aid and
reform. The study discusses the impact of aid on the
initiation and pace of reform, on the policy content,
and on the effectiveness of implementation. The paper
ends with some conclusions about appropriate future
aid relationships.