This paper explores the concept of economic transformation and investigates its relevance to present-day policy debates in Tanzania. This paper, therefore, is conceptual in nature and starts by taking a critical look at a homemade definition of economic transformation. It then presents a brief literature review of the concept of economic transformation and its relation to growth by making a distinction between successful and failed transformations. More specifically, it argues that historical experiences show that there is not a unique process of transformation, but rather a variety of contrastive pathways depending on whether or not they lead to the cumulative convergence or divergence of productivities across the different sectors of the economy.
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 […]