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 foregone 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.
A Case Study of Mtwara, Lindi and Dar es Salaam Regions This paper examines the citizen’s trust in government and their willingness to pay taxes to improve public goods and services in Tanzania. We use a logit model to estimate the effect of government trust on willingness to pay taxes on improved public goods/services. Chi-square […]
Central-local government relations in property tax administration in Tanzania Inter-organisational cooperation in revenue collection has received limited attention in the tax administration literature. Recent experiences from Tanzania offer a unique opportunity to examine opportunities and challenges facing such cooperation between central and local government agencies in a developing country context. The administration of property taxes […]
This paper shows that in Tanzania, economic growth contributes to job creation and employment opportunities, however, it does very little to curb income inequality. Using official data from various local sources compiled by the National Bureau of Statistics…
This paper identifies some major drivers of per capita public health expenditure growth in Tanzania using nationally representative annual data between 1995 and 2014. It used a Bayesian model based on Markov Chain Monte Carlo (MCMC) simulation.