The collapse of the central planned economy in tanzania marked the failure of command or state run economies as a means of allocating resources among competinguses.discuss
Dear Student,
The Arusha Declaration of 1967 in Tanzania led to the nationalization of a number of industries and public services. By the 1980s, the economy of Tanzania was completely nationalized. However, in the long run a centrally planned economy led to massive economic decline. During 1979 and 1980, the relatively high international oil price, the country’s declining terms of trade, and the sluggishness of the domestic economy brought about rapid inflation and the emergence of black markets and smugglers. The balance of payments of the country was severely affected. Tanzanian government took many steps to keep the inflation under check using rate cuts and all. But nothing worked. Finally, it went to the IMF for help. IMF asked Tanzania to shift to a mixed economy.
Hope this answers your question.
Regards,
The Arusha Declaration of 1967 in Tanzania led to the nationalization of a number of industries and public services. By the 1980s, the economy of Tanzania was completely nationalized. However, in the long run a centrally planned economy led to massive economic decline. During 1979 and 1980, the relatively high international oil price, the country’s declining terms of trade, and the sluggishness of the domestic economy brought about rapid inflation and the emergence of black markets and smugglers. The balance of payments of the country was severely affected. Tanzanian government took many steps to keep the inflation under check using rate cuts and all. But nothing worked. Finally, it went to the IMF for help. IMF asked Tanzania to shift to a mixed economy.
Hope this answers your question.
Regards,