Tanzania has undergone two transformations in the last thirty years. It has transformed its economy from one of state ownership and control to a market-based system. In addition, it has transformed its political system from a constitutionally entrenched single-party system to an openly competitive multiparty system. It has accomplished these transformations peacefully and without major incidents of ethnic violence or civil disruption. Tanzania is conspicuous for what has not taken place there. In a region of the world that has experienced more than its share of political turbulence, including failed states, military coups, local warlords, ethnic cleansing, regional secesions, civil...

The economic trajectory of post-independence Tanzania is painfully familiar. A poor choice of economic policies led to economic decline, which manifested itself in growing and acute scarcities of essential goods and services. Pervasive scarcities, in turn, gave rise to the rapid spread of parallel markets, which gradually came to provide a larger and larger proportion of what ordinary Tanzanians consumed on a day-to-day basis. Tanzania developed a binary economic system. The official economy, which was largely state regulated and controlled, delivered fewer and fewer of the goods Tanzanians needed and consumed on a daily basis. The unofficial or parallel economy...

To succeed, the strategy of import substitution required a massive transfer of economic resources from agriculture to industry. The development economists had specified that the government should treat agriculture as a source of capital and labor for new, state-sponsored industrial firms rather than as an object of development in its own right. Their ideas had vast ramifications for other sectors of the nation’s economy and for other policy areas. Governments interested in industrial development would need to reverse the economic priorities of the colonial era, which had prioritized agricultural exports. Budget appropriations for infrastructure, for example, would need to assign...

Despite desperate economic conditions, Tanzania did not initiate an economic reform program until summer 1986, nearly seven years after the end of the Ugandan War. If the famine conditions that prevailed during summer and fall 1974 are taken as Tanzania’s low point, twelve years elapsed before the 1986 IMF agreement, which most observers view as the beginning of the transition to a market economy.¹ During all that time, Tanzania managed to limp along with only minor changes in its policies: the pattern of poor policy choices leading to poor economic conditions persisted. The seemingly inexplicable delay between low point and...

There are two critical weaknesses in the aid debate. The first is its reliance on an oversimplified, two-actor model, the tendency to view the reform dialogue as one between unitary agents on each side. The Tanzanian reality was far more complex. During the long period of delay between the 1974 economic low point and the initiation of a reform effort in the mid-1980s, both the donors and Tanzanian leaders showed internal divisions in their approach to the country’s economic policies. The second weakness is that both sides exaggerate the impact of donor influence: one side holds the donors almost exclusively...

By the mid-1980s, it appeared that Tanzania had the major ingredients in place for sustained reform. A reform-minded president had replaced Julius Nyerere. A new economic paradigm that emphasized market forces had discredited the older idea of state-sponsored industrialization. Following on the diffusion of this paradigm in the form of the Berg Report, the donor community had come together in its insistence on policy reforms as a precondition for economic assistance. An influential segment of the country’s political leadership and many of its most prestigious economists had begun to advocate reforms both within the government and to the Tanzanian public....

Tanzania has attained its post-reform equilibrium. During five decades of independence, it has morphed from a failed experiment in socialist egalitarianism to a dystopian realm in which economic and political inequalities have taken on every appearance of permanence. The principal political characteristics of contemporary Tanzania are dominance by a political-economic oligarchy embedded within the CCM hierarchy, the propensity of many members of this oligarchy to use corruption as a means of consolidating and maintaining their dominance, and a pattern of economic growth that benefits those at the top of the society. Although not all the members of the Tanzanian oligarchy...