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I 7 EVALUATION AN D CONCLUSION S ^^ur analysi s in the previous chapters offers severa l conclusions, generaliza- ^^tions, and hypotheses for further research that we wish to summarize in this chapter. Perhaps the firs t genera l conclusio n tha t can be draw n from th e Tanzania n experience is that in an economy that is poor and does not have a well-developed infrastructure an d bureaucracy, i t is next-to-impossible t o impose a complete, top-down, bureaucratic syste m of economic control . In an undeveloped syste m such as prevailed in Tanzania after independence, economic institutions such as product markets, the system of agricultural production, manufacturing produc tion , and others, were organized along dual lines, with a small, modem secto r typified by private plantations, large private manufacturing establishments, and so forth, operating alongside a diverse traditional sector. The nationalization of the late 1960 s affected largely the modem part of the economy an d created a large number of additiona l economi c an d bureaucratic units, patterned along the lines of the modem sector, and initially leaving much of the traditional sector unaffected. The effort to expand the modem sector under different ownershi p (publi c a s oppose d t o private ) continued throughou t th e 1970s. It appears, however, that it was the attempt to destroy the traditional sector that created the major problems in Tanzania. That attempt took the form of efforts 186 Evaluation and Conclusions 18 7 to control marketing centrally and to organize production according to concepts quite different tha n the ones that had prevailed until the early-to-mid-1970s. In manufacturing, small-scal e activitie s wer e discouraged, an d in services almos t all activities were taken over by the state. The traditional secto r in Tanzania had very long and strong roots, however. It was organized on the basis of a subsistence, agrarian economy, which in turn was oriented along food-first line s and on nonagricultural products and services catering t o thi s agraria n economy . Th e gradua l commercializatio n o f largel y subsistence-oriented farm operations had not been completed at the time that the state attempted t o take over the institution s supportin g thi s traditional sector , especially th e many privat e agent s operating alon g the agricultural marketin g chain. Furthermore, the state did not have the means to fully substitut e for the range o f product s an d service s provide d t o th e peasant s (an d als o t o urba n residents) in exchange for their marketed surplus. The result appears to have been a gradual "disappearance" of the traditional sector (but only from official eyes ) and its re-emergence a s an unobserved but important "second economy." This second economy appears to have been responsible for the maintenance of the real welfare of most inhabitants of Tanzania, despite indications by official statistic s that the economy had collapsed by the early 1980s . It appears that a traditional economy in the early stages of development and commercialization, suc h as existed i n Tanzania in the 1960 s and 1970s , is not easily amenabl e t o centralize d bureaucrati c control. Perhap s th e reason s ar e social as well as economic. The traditional, extended-family syste m in Tanzania and other African countrie s provides economic an d social securit y tha t cannot be easily and suddenly substituted by Western-type, centralized welfare institutions when the economy is not more developed. These considerations, however, are beyond th e scop e o f thi s repor t an d ar e subject s fo r futur e research . Ou r analyses in Chapters 3 and 5 illustrated the importance of the parallel economy and the diversity of signals sent to economic agents by the official and the second economies. Another aspec t o f th e paralle l econom y tha t ha s direc t distributiona l im plications i s the allocation of rent s generated through the bureaucratic contro l mechanisms. I t wa s see n i n Chapter s 5 an d 6 tha t parallel-econom y price s (including that for foreign exchange) throughout the period of crisis were substantially highe r than official prices . Thi s implie s tha t recipients o f good s...


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