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Is Tanzania a Success Story?

Is Tanzania a Success Story?

A Long-Term Analysis

(p.357) 10 Is Tanzania a Success Story?
African Successes, Volume I
Sebastian Edwards
University of Chicago Press

This paper provides an historical perspective on the reform process initiated in Tanzania in1986, which deepened in 1996. I concentrate mostly on the period spanning from 1967, when the Arusha Declaration was adopted by the official political party the TANU, and 1996, when a new approach towards foreign aid was implemented. I am particularly interested in investigating how external aid affected Tanzania during the early years, and how it contributed to the demise of the economy in the 1970s and 1980s. I also analyze the role played by foreign aid in the subsequent (after 1996) recovery of the country. I emphasize both technical as well as political economy issues related to imbalances, disequilibria, devaluation, black markets, adjustment, and reform. Because of the emphasis on foreign aid and macroeconomics, I pay special attention to three important episodes in Tanzania’s economic history: (a) the exchange rate crisis of the late 1970’s and early 1980s; (b) the IMF Stand-by Program and the maxi-devaluation of 1986; and (c) The serious impasse between donors and the Tanzanian authorities in the mid-1990s. At the end of the analysis I ask whether Tanzania is, as officials from the multilateral institutions have claimed repeatedly, a “success story.”

Keywords:   Africa, Tanzania, foreign aid, devaluation, reforms, corruption, Nyerere, IMF, World Bank, International Monetary Fund

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