of the Rent-Seeking Society,” Anne O. Krueger theorized that where rents are available from bureaucratic positions, the economically prudent family would find it more lucrative to use its resources to purchase a civil service position than to rehabilitate its farmland or upgrade its factory.22 Krueger’s analysis describes Tanzania perfectly. It did not take Tanzanians long to discover that funds invested in productive businesses were high risk and low return relative to gains from holding public office. Indeed, Tanzania’s socialist ethos accentuated this problem since it meant that investment in a profit-making enterprise was at a particularly high level of risk. Government positions, by contrast, were both secure and remunerative. The desirability of rent-seeking opportunities changed the explanations for Tanzania’s tendency toward rampant bureaucratic expansion. Tanzania did not expand its bureaucracy in order to manage economic growth, but because there was a clamor for rent-seeking opportunities among members and supporters of the governing party.
In today’s climate of improved freedom of the press, corruption scandals attract the attention of the Tanzanian media. The almost daily reports of corruption scandals are socially demoralizing because they call attention to the unjust enrichment of a few well-connected individuals at the expense of the public. The demoralization corruption creates is obvious everywhere. It fosters an atmosphere of cynicism and mistrust and causes ordinary citizens to become indifferent or even hostile toward government programs, which the public perceives as conduits for the transfer of public resources to private individuals. In Tanzania as in other societies where corruption has contaminated the economic atmosphere, citizens begin to doubt the validity all public sector programs, which, they believe, always have an ulterior purpose.
The demoralization caused by corruption, ironically, has also had some benefit in making it easier to introduce economic reforms. When it came time to move away from the state-centered approach that had caused such deep decline, very few Tanzanians objected. The dog that did not bark in Tanzania was citizen protest against economic liberalization and in favor of retaining the socialist economy. Unlike many countries that undertook sweeping economic reforms demanded by the international lending institutions (ILIs), Tanzania did not experience food riots or other forms of public demonstration against the process. Although some Tanzanian political leaders and intellectuals inveighed against the reforms the World Bank and IMF insisted on, their criticisms were tempered by the fact that they had very little resonance among ordinary Tanzanians. Few Tanzanians regret the passing of the difficult conditions they had to live through during the decades following independence.
Estimates of the budget effects of corruption vary. In 2009, President Kikwete estimated that one-third of Tanzania’s annual budget of nine trillion (Tanzanian) shillings was being lost to corruption.23 Transparency International offers a somewhat lower figure, estimating that about 20 percent of the government budget is lost annually to corruption.24 Whichever is correct, the result is the same. Corruption is an upward transfer of income: the poorer people in the society pay bribes to relatively better off public officials. The schools, hospitals, and public services that are important to the poor and the middle class became starved for resources; corrupt politicians could afford a lavish lifestyle. The sheer magnitude of this loss has given corruption an additional self-reinforcing quality: lowered revenues make it difficult to raise public sector salaries; low salaries are the starting point for corrupt behavior.
The corruption that emerged during the era of decline remains the scourge of the Tanzanian economy. Despite an outpouring of government reports, practically daily media coverage, and the creation of a series of anti-corruption tribunals within the government,25 it exists everywhere at both the lowest and highest levels of the system. A 2010 Dar es Salaam Guardian article describes the extent of Tanzania’s corruption in the following terms:
Dishonest traffic police will use their uniforms to finance their homes, some magistrates sell justice to own posh houses, some bankers, too, will steal to finance their mansions and journalists are not spared; they will use their pens to finance their dream homes, and so goes the shameful game! To some of the business communities the shortcut way to own a palatial home is through tax evasion, frauds or dirty business like drugs trafficking. While in a country like South Africa buying a $1 million home without borrowing from the bank or having clear source of funds can land you in jail, in Tanzania, the situation is the opposite.26
According to a 2009 survey of corruption, Tanzanians viewed the police force as the most corrupt institution alongside the judiciary and the health sector, followed closely by land tribunals and local governments.27 An updated survey conducted in 2011 by the independent anti-corruption NGO Front Against Corrupt Elements in Tanzania (FACEIT), funded by the government of Denmark, added the Tanzania Revenue Authority to this list.28 A fuller list of corrupt institutions would include the Tanzanian military, recently given the grade D– by Transparency International for a variety of corrupt practices, including procurement, promotions, and extractions from local communities.29 The Tanzania Corruption Tracker has cited numerous complaints about the corruption at the Port of Dar es Salaam, including loss of containers, smuggling of banned cargo, and loss of revenue.30 It has also cited the National Housing Authority, whose officials continue to extract bribes for rental or repair of government-owned apartments.31 All these reports point toward a single conclusion: corruption enables a stratum of public officials in these institutions to afford a lifestyle beyond the imagination of most ordinary Tanzanians.
During Tanzania’s socialist period, public officials hid the wealth they gained through corruption. The CCM’s leadership code and the ethos of social equality discouraged conspicuous consumption. This is no longer so. Today, the wealth of Tanzania’s politico-economic oligarchy is easy to observe. Almost any Dar es Salaam taxi driver can provide a guided tour of the city’s “posh” neighborhoods as well as a detailed narrative of the lifestyles of the rich and famous who reside there. The exclusive residential communities on the northern coastal shores of the capital city provide visual evidence that the members of Tanzania’s political-economic oligarchy no longer feel the need for diffidence about the extent of their personal wealth. And since the owners of these homes, many of which belong to high-ranking political leaders and administrative officials, appear to be widely known among Tanzanians, the opulent walled residences of Oyster Bay and Msasani provide an incontrovertible indicator of the interconnectedness of political power and private accumulation. They also provide compelling evidence of the role of corruption as the link between the two.
Using one of the more powerful images in modern political economy, economists Brian Cooksey and Tim Kelsall have depicted corruption as Tanzania’s tragedy of the commons.32 Their metaphor is apt. Just as pastoralists overpopulate their common grazing lands, Tanzania’s public officials engage in corruption even though they are well aware that it degrades the overall performance of their nation’s economy. The reason is the same: one official’s gain from corrupt activity is greater than his or her share of the collective economic loss. The follow-up question posed by the work of Nobel Prize winner Elinor Ostrom is whether a society generates corrective political mechanisms that address the problem.33 Whereas pastoral and other communities have been able to invent political institutions that enable them to manage common resources for the public good, Tanzania has thus far been unable to do so. The best prospect may lie in the electoral arena where corruption has become the largest single issue. In the 2010 presidential election, the Chadema Party (Party for Democracy and Progress), which campaigned on an anticorruption platform, gained about 27 percent of the presidential vote. Its popularity suggests that corruption, left unaddressed, may prove to be the weakness that finally loosens the CCM’s grasp on power.
In the eternal quest to develop a political economy that differentiates between causes and effects, corruption has a special position: it functions as both. It is an outcome of economic decline because it takes root in falling public sector incomes. However, as corruption transfers income away from government to private consumption, it is also among the causes of poor economic performance, since it helps to perpetuate the budget difficulties that first brought it about.
