INFRASTRUCTURE QUALITY, FIRM CHARACTERISTICS AND CORRUPTION IN TANZANIA

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Abstract

The primary objective of this study was to examine what effect corruption has on firms’ ability to access quality infrastructure in Tanzania, by examining firm heterogeneity and the incidence of graft in the firms’ quest to conduct business operations, dependent on available infrastructure such as electricity and water. The results show that, regardless of firm age, size and ownership – all firms in Tanzania face the same challenges of intermittent power and water cuts, significant delays in the connection of power and water after submitting applications, and the need to pay bribes at every stage of the business lifecycle in order to get things done. Also, an examination of the pattern of FDI inflows to Tanzania over the last ten years revealed that, although the country has great foreign currency earning and FDI-harnessing potential, the business environment is not conducive enough to attract increased and significant levels of FDI. It is therefore recommended that the Government of Tanzania intervenes and puts policies in place to develop its local infrastructure so that it can further grow its economy, thereby increasing employment and trade opportunities, especially if it wishes to attract foreign investors.

Keywords: Firm Ownership, Infrastructure, Corruption, Graft, Tanzania

How to cite this paper: Makoni, P. L. (2014). Infrastructure quality, firm characteristics and corruption in Tanzania. Corporate Ownership & Control, 12(1-4), 379-385. https://doi.org/10.22495/cocv12i1c4p2