Paper short abstract:

To what extent have reforms for democratic governance been able to leverage the extractive sector in Tanzania through transforming the institutional structure and deal with competing interests on international, national and local level? Analysed through the lens of “political settlement theory”.

Paper long abstract:

Tanzania has emerged as one of the leading gold mining countries in Africa. New urban areas develop around the mines. Still mining give a small contribution to GDP. Huge natural gas deposits are discovered, and have attracted the largest foreign investment ever in Tanzania. But so far little of inclusive development have been generated. The paper analyses how and to what extent reforms for deepening democratic governance are leveraging the extractive sector, for inclusive growth, through transforming and shaping the institutional structure (formal and informal) and organizational capacities to deal with competing interests (personal versus public; intra elite conflicts; party versus collective; local versus national; and national versus international). In the analysis of the underlying power structures on national and local level, we link to the expanding literature on "political settlement theory". This lens allows an analysis of the contending interests which constrain and facilitate institutional and developmental change.

Amongst the reasons attributed to the limited outcome in terms of inclusive development and local content, include inadequate political leadership capacity and political systems for reconciliation and coordination of competing local, national and international claims on the natural resources. Political measures to ensure inclusive benefits for current and future generations are not guaranteed through political settlements. At the technocratic level, weak technical leadership capacity and corruption are factors associated with the failure at the executive level to intervene and to link investments to local development plans, financing and implementation.