Monday, July 18, 2011

The political economy of the investment climate in Tanzania.

Hakuna maendeleo Tanzania licha ya wawekezaji kuwekeza kwa wingi

Ripoti hiyo imeandikwa na Brian Cooksey og Tim Kelsall

Although Tanzania suffers from an imperfect form of liberal democracy and high levels of corruption, it has attracted unprecedented levels of foreign investment over the past fifteen years, and is predicted by the IMF to be one of the fastest growing countries in the world over the next decade. This provides some grounds for thinking that Tanzania represents a case of ‘developmental patrimonialism’, a type of regime that achieves development without conforming to ‘good governance’ orthodoxy.

This Research Report rejects that idea. Drawing links between the management of economic rents and the climate for business and investment, it shows that rent-management in Tanzania remains largely decentralized and undisciplined, with deleterious consequences for investors. In previously fast-growing sectors like mining, investors are increasingly circumspect, while high potential areas like horticulture appear largely ignored. The result is that recent increases in economic growth – which have yet to have a discernible impact on poverty reduction – are likely to be ephemeral. Tanzania, we conclude, is a case of ‘non-developmental patrimonialism’, and its regime is likely to face a mounting legitimacy crisis in coming years.

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