From moderate to radical resource nationalism in the boom era: Pockets of effectiveness under stress in ‘new oil’ Tanzania

Abstract

The oil boom (2004–2014) led to a re-emergence of resource nationalism in African countries. Much attention has been paid to the shift of control over resources from foreign private interests to domestic, often state-controlled companies. Less is known about the impact on the capacity of state organizations to regulate and develop the sector. This article draws on a Pocket of Effectiveness (PoE) approach to analyze the development of capacity in Tanzania. It suggests that resource nationalism developed in two phases. First, a moderate form emerged, which allowed the Energy and Water Utilities Regulatory Authority (EWURA) and to some extent the Tanzania Petroleum Development Corporation (TPDC) to become PoEs able to help controlling the rents of private, primarily foreign companies. Later, a more radical version presented still tougher terms and centralized decision-making to such an extent that it undermined the autonomy and capacity of the two organizations. The more radical phase continued and intensified after the collapse of oil prices. This suggests that there can be a great deal of ambivalence about the impact of prices and resource nationalism within a country because interventions are shaped by political dynamics, which in Tanzania's later and more radical phase overruled global price signals.