Rethinking the state’s price control role amid liberalisation - 1
Tanzania is grappling with the legacy of state-controlled pricing as it continues to transition toward a liberalized market economy. The article questions the appropriate role of the government in regulating prices when market outcomes are perceived as unfavorable by the public.
Why it matters
It addresses the fundamental tension between historical state interventionism and modern economic liberalization in developing nations.
Whenever the price of coffee falls, farmers expect government to intervene. When fuel prices rise, motorists demand action. When bus fares increase, passengers look to regulators for protection.
More recently, butchers in Bukoba reportedly appealed to government to support higher meat prices after a local rancher began selling beef more cheaply than they were charging.
These examples have one thing in common. They all reflect a deeply rooted belief that government should determine prices whenever markets produce uncomfortable outcomes.
That expectation is understandable. It is a legacy of Tanzania’s economic history.
For nearly two decades after the Arusha Declaration of 1967, government occupied the commanding heights of the economy.
It owned major industries, controlled agricultural marketing, regulated trade and fixed many producer and consumer prices.
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