Local Economic Development: Unpacking potentials for accelerated transformation of Tanzania
Local Economic Development (LED), is now among the latest preoccupations in development reflecting the industry’s shift from focusing on large and obtuse concepts and entities to smaller more manageable parts that can be joined up together (du Plooy, 2017; Khambule, 2018). LED relates to a participatory process that enables individuals and different types of market and non-market entities to utilise spatially proximate resources to engage in economic production and distribution of rents that create better conditions for economic growth and employment generation (Swinburn et al., 2006). LED focuses on identifying and utilising primarily local resources (and capital), ideas and skills to stimulate economic development (Sekhampu, 2010).
Globally, the current focus on LED is reflective of concerns over the limited utility of aggregating the contributions of vast (and occasionally) distinct populations into countries or economic regions (for example, Sub Saharan Africa or the developing world) which obfuscates the contribution (and indeed effect on) of productive sub-national entities. This is nowhere more pronounced than in Africa where a combination of large country sizes, inadequate regulatory environment, challenging infrastructure and uneven development and distribution of resources, has impacted sub national level spill-overs of agglomeration benefits (UNCTAD, 2018; World Bank, 2017). Rather than aid the development of local populations, the agglomeration of economies has itself hindered the distribution of economic rents. The result has been a spill-over of disbenefits as uneven development of people, infrastructure and capital has ensued within polities and geographical sovereignties. Attendant effects of uneven development have also been evident with inequality of income, opportunities, services, rights and governance at the fore. Evidence of uneven local development has been pronounced in some regions, with 7 out of the 10 most unequal economies being found in Sub Saharan Africa (Beegle et al., 2016). Rather, paradoxically, inequality in such regions has grown in recent years despite record flows of investment (Shimeles and Nabassaga, 2018). Quick attempts to rationalise such trends point to a prevalence of sub-optimal policy outcomes (Andrews, 2008), mainly driven by the fallacy of decomposition—the mistaken notion that what is true of an individual is necessarily true of a group.
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