Contents -- FOREWORD -- ACKNOWLEDGMENTS -- ABBREVIATIONS -- OVERVIEW -- PART I POVERTY REDUCTION AND GROWTH: RECENT PERFORMANCE AND PROSPECTS -- 1. A DECADE OF REFORMS, MACROECONOMIC STABILITY, AND ECONOMIC GROWTH -- Improved Macroeconomic Fundamentals -- Determinants of Economic Growth in Tanzania -- Conclusions -- Notes -- 2. THE CHALLENGE OF REDUCING POVERTY -- Economic Inequality, Poverty, and Growth -- Nonmonetary Poverty Measures -- Economic Characteristics of the Poor -- Explaining Household Consumption -- Conclusions -- Notes -- 3. SPATIAL DIMENSIONS OF GROWTH AND POVERTY REDUCTION -- Overall Regional Income Patterns -- Implications for Regional Policy -- Notes -- 4. OUTLOOK ON GROWTH AND POVERTY REDUCTION -- Growth Scenarios -- Review of Tanzania's Growth Prospects in Historical and International Contexts -- Policy-Based Projections -- Input-Based Projections -- Sectoral Projections -- Reaching the MDG and NSGRP Targets -- Conclusions -- Notes -- PART II SECTORAL PERSPECTIVES ON GROWTH -- 5. AGRICULTURAL PRODUCTIVITY AND SHARED GROWTH -- Removing Constraints on Agricultural Growth -- Public Expenditures to Support Agricultural Growth -- Notes -- 6. FOSTERING GROWTH, EXPORT COMPETITIVENESS, AND EMPLOYMENT IN THE MANUFACTURING SECTOR -- Determinants of Manufacturing Sector Growth -- Enhancing the Export Performance of the Manufacturing Sector -- Conclusions and Recommendations for a Manufacturing Sector Growth Strategy -- 7. THE TOURISM INDUSTRY -- Economic Contribution of Tourism -- The Tanzanian Tourism Industry Compared with That of Other Countries -- Growth Potential -- Recommendations -- Notes -- 8. THE INFORMAL ECONOMY -- Constraints to Growth of Enterprises in the Informal Sector and Formalization -- Benefits of Increasing Formalization -- Implications for Policy -- Notes -- PART III ELEMENTS OF A STRATEGY FOR SHARED GROWTH.

9. FOSTERING INNOVATION, PRODUCTIVITY, AND TECHNOLOGICAL CHANGE -- Education -- Innovation -- Information and Communication Technologies -- Summary of Issues and Recommendations -- Notes -- 10. ENHANCING THE BUSINESS ENVIRONMENT -- Scaling Up Access to Infrastructure -- Scaling Up Access to Capital and Finance -- Enhancing the Public-Private Interface -- Notes -- 11. HARNESSING NATURAL RESOURCES FOR SUSTAINABLE GROWTH -- Contribution of Natural Resources to Growth and Government Revenue -- Public Investment in Natural Resource-Based Growth -- Untapped Growth Potential -- Potential for Local Spinoff Effects -- Potential for Poverty Reduction -- Sustainability of Growth -- Externalities -- Recommendations -- 12. ENHANCING THE CAPACITY OF THE POOR TO PARTICIPATE IN GROWTH -- Improving Human Capital of the Poor -- Building Physical Capital of the Poor -- Dealing with Vulnerability -- Conclusions -- Notes -- PART IV MANAGING POLICIES AND EXPENDITURES FOR SHARED GROWTH -- 13. SCALING UP PUBLIC EXPENDITURE FOR GROWTH AND POVERTY REDUCTION -- Domestic Resources -- Scaling Up Foreign Aid -- Debt Sustainability -- Reducing Aid Dependency -- Conclusions -- Notes -- 14. COORDINATION OF ECONOMIC POLICY FORMULATION AND IMPLEMENTATION -- Review of Institutions for Economic Policy -- Challenges -- Implementation of the Growth Agenda of the NSGRP -- Note -- BIBLIOGRAPHY -- INDEX -- BOXES -- 1.1 Overview of Structural Reforms in Tanzania -- 1.2 Government Spending and Economic Growth -- 2.1 Is Tanzania's Poverty Line Too Low? -- 3.1 Regional Differences in Coping with External Shocks -- 5.1 Organization of the Marketing Chain for Oranges and Onions -- 8.1 Examples of Voluntary Formalization -- 9.1 Benchmarking Tanzania in the Global Context -- 9.2 The United Nations Development Programme's Technology Achievement Index.

9.3 Constraints to Technology Access in the Horticulture Sector in Tanzania -- 10.1 Aspects of Governance -- 12.1 Gender Differences in Education -- 12.2 Marketing Opportunities and Crop Adoption -- 12.3 Positive Consequences of a Shock -- 12.4 A Poverty Trap in Shinyanga -- 12.5 Analysis Helps Clarify Whom to Target -- 14.1 Governance Arrangements to Strengthen the Effectiveness of Growth-Enhancing Interventions -- FIGURES -- 1.1 Annual Growth of Real GDP at Factor Cost, 1960-2005 -- 1.2 Merchandise Exports: Traditional and Nontraditional, 1990-2004 -- 1.3 Government Finance, 1991/92-2004/05 -- 1.4 Money and Inflation, 1990-2004 -- 1.5 Domestic Credit and Interest Rates -- 1.6 Capital Formation, 1995-2005 -- 1.7 Savings and Investment, 1990-2005 -- 1.8 Exchange Rate and Balance of Payments, 1990-2004 -- 1.9 Public and Publicly Guaranteed Debt and Debt Service, 1990-2005 -- 1.10 Decomposition of Economic Growth per Worker into Contribution of Human and Physical Capital Accumulation and Total Factor Productivity, 1985-2005 -- 1.11 Growth Rates of GDP Inclusive and Exclusive of Government Spending, 1990-2005 -- 1.12 Contribution of Private and Public Expenditure to Economic Growth, 1990-2005 -- 2.1 Simulated Changes in Poverty, 1992-2002 -- 2.2 Growth Incidence Curve: Nation as a Whole -- 3.1 Average GDP by Region, 1996-99 and 2000-03 -- 3.2 Average Maize and Paddy Yield per Hectare, Fiscal Years 1995-2001 -- 3.3 Interregional Output Disparities, 1980-2003 -- 4.1 Projections of GDP Per Capita and Poverty, 2003-25 -- 4.2 Average Annual Per Capita GDP Growth for Five-Year Periods, 1961-2005 -- 4.3 Average Per Capita Real GDP Growth in 185 Countries, 1994-2003 -- 4.4 Average Years of Schooling in Seven African Countries, 1960-2000 -- 4.5 Contribution of Capital Accumulation to Growth, 2005-25 -- 4.6 Projected Reduction in Consumption Poverty, 2001-15.

4.7 Projected Reduction in Consumption Poverty under Alternative Compositions of Growth, 2001-15 -- 4.8 Projected Reduction in Malnutrition (Underweight), 2004-15 -- 5.1 Average Annual Agricultural Growth, 1990-2003 -- 5.2 Labor Productivity Levels in Tanzania and Comparators, 1990-2002 -- 5.3 Labor Productivity Trends in Tanzania and Region, 1990-2003 -- 5.4 Producer and Intermediary Returns as a Percentage of the Border Price -- 5.5 Cost Components of Marketing Margins -- 5.6 Cost Components of Producer Margins -- 6.1 Growth of Manufacturing Sector Output and Exports -- 7.1 Tourism Receipts, 1991-2005 -- 7.2 Total Visitor Arrivals in Kenya and Tanzania, 1996-2004 -- 7.3 World Travel and Tourism Council Competitiveness Index, 2004 -- 8.1 Size of the Informal Economy for Selected Countries, as a Percentage of Gross National Income -- 8.2 Estimated Unreported Revenue for Tax Purposes -- 8.3 Median Value Added per Worker -- 9.1 Adult Literacy Rates, 1970-2002 -- 9.2 Average Years of Schooling, 1960-2000 -- 9.3 Reading Scores and Mathematics Scores -- 9.4 Predicted Earnings in Manufacturing Sector Based on Manufacturing Firm Surveys -- 9.5 Marginal Social Returns per Year of Education Based on Integrated Labor Force Survey -- 9.6 Projected Shortfall of Health Care Workers -- 9.7 ICT Infrastructure: Telephones, Personal Computers, and Internet -- 10.1 Cost of Inefficiencies in the Business Environment as a Percentage of Sales, Various Countries -- 10.2 Cost Structure of Firms by Average Percentage of Total Costs -- 10.3 Percentage of Enterprises Rating Problems as Major or Very Severe Constraints on Enterprise Operations and Growth, 2003 -- 10.4 Effect of Low Levels of Infrastructure on Economic Growth -- 10.5 Proportion of Rural Population Living within 2 Kilometers of an All-Season Road.

10.6 Real Interest Rates for T-Bills, Lending, and Savings, 1993-2005 -- 10.7 Governance Indicators for Tanzania, 1996-2005 -- 10.8 Informality in Tanzania and in Comparator Countries -- 10.9 Percentage of Firms Inspected and Number of Inspections per Year, by Government Agency -- 10.10 Rating of Problems by Enterprises in Tanzania and Comparator Countries -- 10.11 Enterprises Reporting That Bribes to the Government Affect Their Businesses in Tanzania and Comparator Countries -- 10.12 Requests for Bribes during Inspections -- 10.13 Interaction with Institutions That Demand Bribes: Microenterprises versus Small, Medium, and Large Enterprises -- 11.1 Annual License Revenue and Number of Foreign Vessels in EEZ, 1998-2004 -- 11.2 Income to Ololosokwan Village, Ngorongoro District Council, 1999-2003 -- 11.3 Village Incomes from Hunting in Lunda-Mkwambi (Game-Controlled Area), Idodi, and Pawaga Divisions, 1996-99 -- 12.1 Primary Education Performance, 1995-2004 -- 12.2 Changes in the Distribution of Access to Education in Rural Kilimanjaro, 2001 and 2003 -- 12.3 Enrollment in Secondary Schools, 1990-2004 -- 12.4 Percentage of Undernourished Children under Age Five, 1991-2004 -- 12.5 Fraction Stunted, by Region (1992-99), and Under-Five Mortality Rate per 1,000 Live Births (2002) -- 12.6 Height of Children in Kagera in 2004 by Stunting Status in 1993 -- 12.7 Nutritional Status of Children by Age, 1999 -- 12.8 Effect of Community Interventions on Average Nutrition Scores in Kagera, 1992-94 -- 12.9 Infant Mortality, 1988 and 2002 -- 12.10 Concentration Curves for Different Health Care Consultations -- 12.11 Births per Individual Women Ages 15-49, by Wealth Quintile -- 12.12 Fraction of People Working as Own-Account Laborers in Agriculture -- 12.13 Disability and Orphanhood Relative to Primary School Attendance -- 13.1 Effective Exchange Rates, 1990-2004.

13.2 Exports of Manufactures as a Percentage of GDP and Exports of Goods and Services, 1990-2002.