Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259894 
Year of Publication: 
2004
Series/Report no.: 
Working Paper No. 2004:22
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
Studying the relation between economic growth and income poverty reduction without taking changes in the distribution of income into consideration is like setting up Othello without Iago in the play. Without any further references to Shakespeare, this paper examines the relations between poverty levels, economic growth and changes in inequality in Tanzania during the 1990s. It offers four conclusions. First, the efficiency with which growth reduces poverty increases with a country's income level, so low-income countries should combine growth promotion with redistribution; second, growth in Tanzania during the 1990s, has accelerated, but has also been concentrated in sectors to which the majority of the poor have few links; third, the efficiency with which income growth reduces poverty in Tanzania appears very sensitive to the pattern of growth; fourth, recent poverty reduction strategies do not appear to recognize this fact and rely apparently instead on a strategy in which growth increases tax revenue that can be used to alleviate poverty through an expansion of publicly supplied (social) services. The selected strategy appears particularly ill-chosen, both because of Tanzania's historical tax collection record and because of the emerging consensus on the state as a facilitator, not a producer, in the development process.
Subjects: 
poverty
inequality
growth
Tanzania
JEL: 
I32
O15
O55
Document Type: 
Working Paper

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