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13. Differential Supply Responses to Liberalization, and Resultant Poverty Alleviation in Vietnam and Tanzania

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Chapter Summary

This chapter offers a comparison of the development trajectories of Tanzania and Vietnam since the early 1980s. At that time, both countries had a socialist orientation in which state institutions were seen as the main means to accumulate capital and foster economic growth. In both countries during the 1980s, this strategy resulted in deadlock, as economic growth did not materialize. They both embarked therefore on economic reform by liberalizing the economy. Economic liberalization was expected to lead to a supply response by farmers as incentives were restored. Such a response occurred massively and dramatically in the Vietnamese economy, but in Tanzania there was only a hesitant and partial recovery of production. Smallholders dominate agricultural production in both countries. This difference in the supply response of agriculture to economic liberalization therefore has grave consequences for poverty alleviation.

Keywords: agriculture; economic liberalization; poverty alleviation; Tanzania; Vietnam



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