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Open Access Knowledge and Scholarship

Date of Award

12-2025

Culminating Project Type

Thesis

Styleguide

apa

Degree Name

Applied Economics: M.S.

Department

Economics

College

School of Public Affairs

First Advisor

Artratrana Ratha

Second Advisor

King Banaian

Third Advisor

Chukwunyere Ugochukwu

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Keywords and Subject Headings

Tanzania, Foreign Aid, ARDL/ECM, Cointegration, Investment, Governance

Abstract

This thesis examines the relationship between output and foreign aid and other important macroeconomic determinants in Tanzania using annual data over 1980–2023 and an ARDL/EC, framework. The Schwarz Bayesian Criterion (SBC) model finds cointegration and shows that investment, employment, and governance are positively associated with the long-run level of output, while aid is not significant. AIC yield a positive long-run aid effect but negative short-run aid impacts, consistent with absorption, bureaucratic, and procurement frictions. Stability diagnostics exhibit stable behavior of both AIC and SBC specification. Policy implications emphasize sustaining productive investment, strengthening labor absorption and skills, strengthening institutional accountability, and introducing external finance body to support high-return capital and human-capital projects. Limitations include data limitation, with some series needing to be reconstructed and transformed to constant 2015. The analysis is also country-specific and does not assess out-of-sample performance, hence generalization is limited.

Comments/Acknowledgements

My profound appreciation to God for unfailing grace and quiet strength at every step. When the road felt uncertain, your peace steadied my heart, you reminded me that you are in control and to trust your provision, protection, and plans for me. Your wisdom opened a path forward. Thank you for sustaining me through the long nights, renewing my courage, and surrounding me with the right people at the right time. This work is, above all, a testimony to your faithfulness.

To my Dad, Ephraim.A. Mwasanguti, and Mom, Nosyaga Mwasanguti, I thank you for the sacrifices seen and unseen, for constant prayers, and for believing in me long before these work existed. Your example taught me discipline, humility, and resilience. To my siblings, Ntimi, Nsaji, Nsuki, and Kelvin, thank you for the laughter, check-ins, and encouragement that kept me grounded. Together you gave me confidence to finish strong; this achievement is as much yours as it is mine.

I am thankful to Dr. Ratha for exemplary mentorship throughout this journey. Your clear standards, timely guidance, and generous feedback pushed me to think more critically, write more precisely, and aim higher than possible. Thank you for your compassion – asking the hard questions, opening doors to new ideas, and believing in my growth at every stage. This thesis is stronger because of your patience, insight, and unwavering support.

To my committee members, Dr. Banaian and Dr. Ugochukwu, thank you for your time, and guidance. Your thoughtful questions, methodological advice, and careful reading sharpened the analysis and strengthened the argument at every revision. I am grateful for the balance of critique and encouragement you brought to this process.

To everyone who contributed along the way – friends, classmates, colleagues, and staff – thank you for many forms of support that made this possible. Your data tips, proofread, and honest feedback helped in ensuring this thesis is done. Thank you checking, celebrating small wins when they mattered most. Also, for every conversation, encouragement, and kindness that helped carry this thesis to its completion.

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