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Journal of African Economies Advance Access originally published online on September 1, 2008
Journal of African Economies 2009 18(2):319-361; doi:10.1093/jae/ejn016
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© The author 2008. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

Key Constraints for Rural Non-Farm Activity in Tanzania: Combining Investment Climate and Household Surveys

Songqing Jina,* and Klaus Deiningerb

a Department of Agricultural, Food and Resource Economics, Michigan State University, East Lansing, MI, USA
b Development Research Group, World Bank, Washington, DC, USA

* Corresponding author: Songqing Jin, Department of Agricultural Food and Resource Economics, Michigan State University, East Lansing, MI, USA. E-mail: jins{at}msu.edu.

We use a survey of small rural enterprises from Tanzania to identify subjective as well as objective obstacles to expansion and productivity of the country's rural non-farm sector. Our results suggest that infrastructure constraints significantly reduce participation in the sector and investment and productivity by existing enterprises. Such constraints are particularly harmful for small enterprises, suggesting that policies to improve delivery of key public services can provide a basis for rural non-farm development, with possible knock-on effects on poverty reduction.

JEL classification: D13 • L25 • O12 • O17


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