We use methods developed by the Commitment to Equity and data from the 2011/12 Household Budget Survey to assess the effects of government taxation, social spending, and indirect subsidies for poverty and inequality in Tanzania. We also simulate several policy reforms to assess their distributional consequences. We find that Tanzania redistributes more than expected given its relatively low income and inequality, largely because both direct and indirect taxes are more excellent targeting mechanism. If the program were expanded to a size that is typical for lower-middle income countries, it could reduce poverty significantly. On the other hand, electricity subsidies are regressive despite attempts to make them more pro-poor with a lifeline tariff.
Since the introduction of the Skills Development Levy (SDL) in Tanzania, the financing of skills training has been contested. The private sector has raised concerns about the size of the levy and the usefulness of training provided by VET centres, and has accused the government of misallocation and misuse of the raised levy. Lack of […]
The gap between national export premium and foreign-ownership premium is stronger in manufacturing firms as opposed to service sectors. Moreover, we find clear and strong productivity premia in size, training programmes and level of development in the manufacturing firms. In the services sector, these premia are always smaller and only significant for medium-sized firms. There […]
The aim of this paper is twofold. Building on Andreoni (2018), we first aim to evaluate the current incentive structures that cause existing inefficiencies and encourage rule-breaking behaviour. Second, we seek to test empirically a number of institutional design strategies for the sector that would better align the incentives of private- and public-sector stakeholders and […]
Can Smallholders benefit from the new market opportunities from the extractive industry in Tanzania?
The recent discovery of huge oil and gas reserves in Tanzania has created a new opportunity for economic growth and development of the country. Tanzania is expected to be one of the leading producers and exporters of natural gas in the coming decade. However, 88 percent of poor Tanzanians live in rural areas and two-thirds […]