Journal of African Economies Advance Access originally published online on March 5, 2007
Journal of African Economies 2007 16(4):596-628; doi:10.1093/jae/ejm002
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Growth, Inequality and Simulated Poverty Paths for Tanzania, 1992–2002
World Bank
gdemombynes{at}worldbank.org
This paper assesses the likely trajectory of poverty rates in Tanzania between 1992 and 2002. To this end, it uses unit-record household survey data from 1992 and 2001 and national accounts growth rates. The projection approach of Datt and Walker (2002) is applied and an extension presented, which is better suited to taking into account distributional changes observed between the two household surveys. The simulations suggest that following increases in poverty during the economic slowdown of the early 1990s, recent growth in Tanzania has brought a decline in poverty, particularly in urban areas. Growth in urban areas will only make a relatively small dent in poverty, and to achieve the 2015 Millennium Development Goal for poverty, Tanzania will need high and accelerated per capita rural growth rates.
JEL classification: I32, O11
1 Demombynes and Hoogeveen are with the World Bank. The findings, interpretations and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors or the countries they represent. Please send correspondence to both gdemombynes{at}worldbank.org and jhoogeveen{at}worldbank.org or to Johannes Hoogeveen, c/o Resident Mission Tanzania, PO Box 2054, Dar es Salaam, Tanzania.
2 This paper was written in preparation for the Tanzania Country Economic Memorandum. Robert Utz was instrumental in starting the paper and his support and feedback are gratefully acknowledged. The authors thank Emmanuel Mungunasi for collecting macro-economic data, and Trudy Owens and Patrick Ward for assistance with the consumption aggregates for 1991/2 and 2000/1. Helpful comments and suggestions were also provided by Louise Fox, Tim Harris, David Sahn, Erik Torbecke, Marc Wuyts, Stephen Younger, participants at the PADI workshop in Dar es Salaam in February 2004, and various members of the Research and Analysis Working Group.