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.
Do Conditional Cash Transfers Improve Mental Health? Evidence From Tanzania’s Governmental Social Protection Program
Cash transfer interventions broadly improve the lives of the vulnerable, making them exceedingly popular. However, evidence of impacts on mental health is limited, particularly for conditional cash transfer (CCT) programs. We examined the impacts of Tanzania’s government-run CCT program on depressive symptoms of youth aged 14-28. Despite no overall intervention effects, results suggest that receiving […]
This article is proposing a regime-oriented approach to explain the variation on the African continent. Democracies, party-based regimes, and military regimes are surely different from each other, but they have a degree of depersonalisation in common that is not found in personalist regimes. For the latter type, term limits are a question of regime survival.Personalist […]
Although there seems to be a consensus that a resource curse often exists (with the notable exceptions of Brunnschweiler and Bulte (2008) and van der Ploeg and Poelhekke (2010)), the empirical literature faces greater challenges in establishing why natural resource wealth is often associated with undesirable outcomes, because cross-country comparisons are plagued with endogeneity issues […]
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 […]