Situating Social Policy in Economic Transformation: THDR 2017: Background Paper No. 4 ESRF Discussion Paper 66

The purpose of this paper is to provide a conceptual framework that situates social policy within a framework of economic transformation in Tanzania. The paper starts by setting out the common economic arguments about the role of social policy in economic development, and examines the arguments that social policies should only come into focus after a country has attained a certain level of wealth. The paper then goes on to demonstrate that the separation of social and economic policies leads to weaknesses within the policy planning process. The paper provides examples, past and present, of how social policies can be used to generate economic development, particularly in the realm of innovation. The paper argues that the role of effective demand in shaping economic transformation provides the critical link between social and economic policies. To conclude, the paper examines the different institutional contexts within which social provisioning occurs in Tanzania, arguing that these different institutional contexts need to be taken into careful consideration when mainstreaming social policy into policies to promote industrialization and economic transformation