MPIA-19971 The impact of fiscal reforms on poverty and income distribution in Tanzania: Macro-micro simulation modelling
This study will analyze the impact of fiscal reforms on income distribution as well as monetary poverty in Tanzania. To this end, the study will use fiscal policy instruments which are indirect taxes and government spending. Specifically, the study will find out how shocks on fiscal policy influences poverty levels and income distribution at the macro level and how these induced changes at the macro level are being transmitted to the households as far as monetary poverty and income distribution is concerned and what accompanying or alternative policies might be implemented in order to safeguard more equitable income distribution as well as diminished monetary poverty amongst households.
The study will use 2009 Social Accounting Matrix for Tanzania that was originally developed by International Food Policy Research Institute (IFPRI) researchers Pradesha A. and Diao X in 2014. This SAM will be updated by using 2016 data to be obtained from National Bureau of Statistics. The model to be used will be the standard static CGE model based on the PEP-1-1 (Version 2.1) model. The reason for the use of this class of economic model is that it is static model which analyses medium term impact of policy changes, it uses actual economic data to estimate how the economy structure react to these changes/shocks and provide a clear understanding of transmission mechanism. Micro simulation will be conducted through using the 2012 household budget survey for Tanzania.