Insecurity and vulnerability are widespread in Tanzania. Many people appear trapped in poverty, lacking the resources to participate in growth. Economic growth has not reduced income poverty as expected and upward mobility has become limited. Social transfers can be an important part of a transformative approach to development which can interrupt the exclusion and adverse incorporation which characterises current patterns of development.
The many sources of risk and widespread vulnerability, together with the affordability and capacity contexts, create two difficult choices: between running one versus several programmes of social transfers; and between categorical and non-categorical targeting. Social transfers should be able to support the risks poor people have to take to improve their livelihoods, escape poverty and contribute to growth. Transfers should also be capable of addressing the main reasons for impoverishment, which include divorce and business failure. A non-categorical transfer targeted at poor households would be best. It would have less exclusion and inclusion errors. Local focus group discussions have proven effective at identifying the poor. However, safeguards against corruption would be needed.
Politically, categorical transfers, such as pensions, child allowance and disability allowance, combined with an employment guarantee might be most attractive as they are simple to understand and easier to target. But given likely scarcity of financial resources for the long-term commitments which are required, as well as implementation capacity, one programme addressing many risks and funded from tax revenues would be optimal.
CPRC Working Paper No. 209, Chronic Poverty Research Centre, London, UK, ISBN: 978-1-908536-06-8, 43 pp.