Alternatives to local content requirements in resource-rich countries

This paper discusses whether and to what extent resource-rich developing countries should introduce local content policies, i.e. requirements to include local inputs in petroleum extraction activities of multinational corporations. We argue that local content needs to be seen as a public expenditure question, since local content requirements increase multinational costs, and hence reduce the taxes which can be extracted from these companies. This implies that there are opportunity costs in imposing local content requirements, since the forgone taxes can be used in others ways which could potentially do more to improve development prospects. Moreover, past experiences of resource-rich developing countries suggest that local content policies can exacerbate key problems of patronage and rent-seeking which resource rents generate, increasing the chance that the resource wealth will prevent rather than help development. These arguments suggest that an optimal local content policy in the context of flawed institutions is a more limited one than those typically pursued by developing countries with recently discovered petroleum reserves. Using qualitative data from Tanzania, a country with recent discoveries of substantial natural gas deposits, we analyze why local content tends to become such a central issue in debates and policy processes, despite its potentially problematic aspects.     

The regulatory framework, unplanned development and urban poverty: Findings from Dar es Salaam, Tanzania

The regulatory framework adopted in many urban areas of the developing countries has been blamed for aiming at unrealistically high standards and for being bureaucratic, thus putting legal land and shelter out of reach of poor households. The latter end up living in unplanned settlements, which develop irregularly, sometimes on marginal land, lacking basic infrastructure. Poverty is therefore perpetuated. This paper evaluates planning standards and administrative procedures as applied to a specific scheme at the outskirts of the city of Dar es Salaam, Tanzania. It is shown that the high standards for plot sizes and road reserves resulted into the production of only 3900 instead of 15,000 plots over the same area, had more realistic standards been adopted. The unit cost per plot would have been a quarter of what it came to be. Centralised and bureaucratic set-ups and procedures resulted into unnecessarily long periods before planning schemes could be implemented; or land, certificates of title or building permits made available to would-be developers. Many develop the land without these permits or titles. Land was much easier to get in unplanned areas but converting it to legality was virtually impossible.The policy framework supports the revision of planning standards; the incorporation of communities and the private sector in land delivery; and the decentralisation and streamlining of procedures. In practice, officials aim at high standards, centralised and lengthy administrative procedures, and direct public sector involvement in land delivery. Evidence is provided of the deleterious effects of the continued hesitation to address the regulatory framework whose revision downwards would result into more legal land being available, faster and at a lower cost; thus reaching more of the low income households, reducing unplanned development and making a positive impact on dealing with urban poverty.     

Interest rate reforms,financial deepening and economic growth in Tanzania: a dynamic linkage

In this paper we examine the dynamic relationship between interest rate reforms and economic growth in Tanzania using two tests. In the first test, we examine the impact of interest rate reforms on financial deepening using a financial deepening model. In the second test, we examine whether the financial deepening, which results from interest rate reforms, Granger‐causes economic growth – using a trivariate model. The empirical findings of our results reveal that there is a significant positive relationship between interest rate reforms and economic growth in Tanzania. However, the results fail to find any support for finance‐led growth.     

Aggregate supply response in Tanzanian agriculture

Tanzania is among the many African countries that have engaged in agricultural liberalization since the mid-1980s. in the hope that reforms that introduce price incentives and efficient marketing will encourage producers to respond. This paper assesses that claim by examining the supply response of agricultural output in Tanzania. Our estimates suggest that aggregate agricultural supply response is quite high so that the potential for agricultural sector response to liberalization of agricultural prices and marketing may be quite significant. The long-run elasticity of aggregate food crop output to relative prices was almost unity. Short-run supply responses were estimated at about 0.35 for aggregate food crops and for all (food and export) crops. Liberalization of agricultural markets, where it increases the effective prices paid to farmers, can be effective in promoting production, although complementary interventions, to improve infrastructure, marketing, access to inputs and credit, improved production technology etc, are probably necessary.     

Informal economy, wage goods and accumulation under structural adjustment theoretical reflections based on the Tanzanian experience

Economic development in sub-Saharan Africa under structuraladjustment witnessed the upsurge of informal sector development—thedevelopment of unregulated labour-intensive activities, in partexport-oriented. This paper argues that two factors played animportant role in shaping the dynamics of informal sector development:(1) the process of the relative cheapening of wage goods asa result of their importation, partly financed through foreignaid, thereby lowering unit-labour costs in labour-intensiveproduction, and (2) the processes at work of subsidising realwages by other forms of economic security as a result of multiple,diversified and spatially extended livelihood strategies. Whilethese factors undoubtedly brought a new vitality to economicdevelopment, this paper questions the long-run sustainabilityof this new trend for two reasons. One is its dependence onforeign aid to finance imports. The other is that it does notappear to propel endogenous increases in productivity by achievinggreater synergy in intersectoral linkages between agricultureand industry.     

Constructing landscapes of value: Capitalist investment for the acquisition of marginal or unused land—The case of Tanzania

The current global wave of land acquisition – variously debated as land grabbing or investment in land – is promoted by the World Bank and the FAO as creating win–win-situations for local populations and investors alike. Common policy recommendations suggest expanding the production of export crops, by making use of marginal or unused land. Considerable potentials for such an expansion are assumed. Taking Tanzania as a case study, the evidence for such types of land is assessed by using a broad range of statistics. We will argue firstly, that the terms marginal and unused land serve as a manipulative terminology for the benefit of attempts to commercially valorize and commodify African landscapes, from biofuel to large-scale food production and tourism. However, they relate to different rationalities of domination. Unused land refers to a state-bureaucratic narrative, which excludes user groups deemed irrelevant for national development, while marginal land refers to a capitalist-economic narrative that excludes what is not profitable. Secondly, the terms are analyzed as categories central for state simplification of social relations attached to land. Modelling of these land use categories based on remote sensing is an attempt to compensate weak state capacities to enhance the legibility of the landscape by constructing it as a landscape of commercial value.     

Partnerships and production: Agriculture and polygyny in Tanzanian households

Women make important contributions to household food production in sub‐Saharan Africa. Women's agricultural productivity is often reduced, however, by inefficient intrahousehold allocation of agricultural resources. Complex marital structures found in polygynous households may complicate resource allocation. Using three waves of the Tanzania Living Standards Measurement Survey–Integrated Survey on Agriculture, we measure the effect of the marital structure, wife position, and plot management on agricultural productivity and input allocations. We find evidence of cooperation within polygynous households. Plots managed by husbands and wives in polygynous households produce more valuable crops, have higher yields, and are more likely to use fertilizer than their monogamous counterparts. Within polygynous households, we observe that plots jointly managed by husbands, first wives, and second wives (together) have significantly more family labor than plots managed by husbands and first wives. This result may provide evidence of different production technologies across plot managers within the same households.     

Milk sales and dietary diversity among the Maasai

In Maasai culture, responsibilities are traditionally divided between genders. Men are in charge of grazing and managing the livestock herds. Women take care of the family, administer food supplies, and are responsible for milking. For them, balancing home consumption of milk (for the family and for the calves), milk sale, and food purchase is a major task. In this article, we first investigate how different milk sales groups vary regarding the use of different food items and the respective quantities consumed by the enkaji, i.e., a Maasai subhousehold. Then, we address the commercialization decision and assess the effect of milk sales on the enkaji's food item use and food consumption. Using the data of Maasai enkajijik in the milk catchment area of a milk collection center in Ngerengere, Tanzania, we estimate the effects by employing propensity score matching procedures. Our findings suggest that milk sellers, especially those selling to the milk collection center, have a more diverse diet. In terms of per person consumption, the groups are markedly similar. Therefore, we conclude that income generated by milk sales is invested in diet diversification rather than in increasing the quantity of food consumed, hence the enkajijik appear not to make use of caloric terms of trade.     

Aid dependence,sustainability and technical assistance Designing a monitoring and evaluation system in Tanzania David Hirschmann

This article demonstrates how aid dependence operates in very concrete terms in the process of consultancy and technical assistance. It draws on the author's experiences in preparing a monitoring and evaluation system for Tanzania's Local Government Reform Program. It illustrates how a comprehensive system of aid dependence, such as prevails in Tanzania, has meant that concern with local ownership, institutional development, affordability and sustainability appeared to find limited support among Tanzanian professionals and in-country donors. The article illustrates how the contradiction between the critically poor data collection system, which seems to demand realism and low cost as priorities and the comprehensive nature of foreign aid operates in four M&E design issues, namely institution building, ambition of performance indicators, pressures for rapid computerization and participatory methods. Finally the article draws a few concluding thoughts about the experience and its relationship to the debates on aid dependency and local ownership.