Why is Tanzania yet to achieve inclusive economic growth and development commensurate with low poverty and high human development levels? Tanzania has recorded sustained economic growth over the last 15 years with the GDP annual growth rate averaging 6.7% from 2002 to 2016. This growth has not yet translated into significant poverty reduction, job creation and productivity gains in the economy remain unsatisfactory. Tanzania’s Development Vision 2025 (TDV 2025) aims to achieve middle-income status by diversifying and semi-industrializing the Tanzanian economy. Thereby, the contribution of the industrial sector to GDP will increase from 24.4% in 2010 to 31% by 2025, and the share of manufacturing will almost double from 9.3% to 18%. However, there is still a lack of understanding of how the desired institutional change in Tanzania can be achieved. The workshops aim to close this knowledge gap by linking research and dialogue institutions that share experiences of other countries, comparing and contrasting how various institutions are responsible for the socio-economic transformation.
One of the key issues of Repoa’s 22nd Annual Research Workshop is that institutions are responsible for shaping the type and form of growth and development. Institutions matter because they shape incentives governing key economic actors in societies in a manner that affects investments in physical and human capital and technology, and the organization of production. The importance of institutions cannot be overemphasized as they not only determine economic growth and development but also various economic outcomes including, but not limited to, how resources are distributed in the society. Institutions may be categorized as hard, for example, the parliament, judiciary, government ministries, departments and agencies, or soft, for example, taxes, laws and policies. They can also be viewed as informal, for example, norms, attitudes, beliefs, habits, or social, for example, inclusion/representation of different groups in society such as gender, class, religion etc.
Contemporary developments in institutionalist theory underpin the significance of initial conditions and path dependency in the process of economic evolution and demonstrate why public actions and intermediary institutions are necessary for effective transformation in the context of real market conditions characterized by uncertainty, transaction costs, and externalities. Given that institutions matter in promoting economic development and noting the limited progress in Tanzania’s industrialization to date, it may be deduced that different forms and quality of institutions may need to be in place for the country’s industrialization agenda to be achieved. Some of the key questions we will explore during Repoa’s 22nd Annual Research workshops will focus on which types of institutions Tanzania needs to achieve the envisioned socio-economic development, which roles government and civil society actors can play in the development of efficient institutions, and how globalization, regional economic partnership agreements, and international trade policies promote or constrain the competitiveness of the Tanzanian economy.