Aid and reform in Tanzania

Abstract

The purpose of this study is to get a better understanding of the causes of policy reform in Tanzania. Specifically we will investigate if and how aid has encouraged, generated, influenced, supported or even retarded reforms. The main aim is to analyze the reform process and not the results of the reforms. The specific questions we will try answer are the following ones: 1) What caused the reforms? 2) Who was responsible for the reform and who were the main actors behind the reform? 3) What decisions were taken? 4) How were the reform decisions affected by aid? 5) Has aid helped sustain reforms? The study is thus an exercise in economic history or political economy. The aspects of the reforms that will be considered are primarily macroeconomic management, structural policies, public sector management, and public expenditures. In analyzing the aid-reform relationship we will especially consider the validity of three hypotheses: 1) Governments choose to reform, or regress, independent of the aid relationship. 2) Non-financial aid has a better impact than financial aid on generation of policy reforms. 3) Financial aid works when policy reforms and institution building are underway.

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