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Title:Possible income redistributional effects of recent policy changes in Tanzania: some thoughts on the 1984-1985 Government budget
Authors:Semboja, J.J.
Rugumisa, S.M.H.
Periodical:The Zimbabwe Journal of Economics
Geographic term:Tanzania
Subjects:economic policy
income distribution
Abstract:Recent policy changes (RPC) in Tanzania have raised concern within and outside regarding the official stated policy objective of building a socialist economy. One of the undesirable consequences of the RPC, it is argued, is that it increases income inequality in the country. Such mover as devaluation, removal of subsidies, quasi-trade liberalization, charging for some 'free services', and the like, it is contended, are all aiming at raising costs to the low income category, and thus they are anti-egalitarian in nature. The objective of this paper is to correct this fallacy. Limiting its discussion to the changes announced in the 1984-85 Governement budget, it shows that, under the specific conditions which exist, - high rates of inflation, shortages of essential commodities, and various administrative controls - the degree of income inequality can hardly be increased by the RPC. It is argued that, whereas some policies may produce changes which increase the degree of income inequality some work to lower it, and the final result may in fact be less clear-cut than the critics may wish to assert. Notes, ref., tab.