Short-term resource mobilization for recurrent financing of rural local governments in Tanzania

Abstract

Rural local governments in Tanzania were reintroduced in 1984. They face the serious problem of financing the operation and maintenance of basic services. The problems have accumulated over the last two decades due to macroeconomic imbalances, past development policies, and institutional problems. Estimates of the additional funds needed for adequate financing of salary and nonsalary recurrent expenditures components are provided. The short-term possibilities of raising these funds domestically are analyzed at the village, district and central levels. Various economic, political and institutional constraints are identified. Competing claims on public sector revenues are discussed. It is concluded that without short-term external assistance for recurrent financing of local governments, basic services are likely to deteriorate even further. Such assistance will probably become increasingly important in the 1990s. Without it the domestic policy changes and administrative improvements needed to mobilize resources in the long run will be difficult to achieve.