Analysis of trade liberalization and its impact on Tanzania trade balance

No Thumbnail Available
Journal Title
Journal ISSN
Volume Title
University of Dar es Salaam
The liberalization of trade is strongly advocated as the means through which economies can accelerate their economic development. The study explores the impact of trade liberalization on trade balance from 1980 to 2010. Ordinary Least Square techniques were used for regression analysis. The method used to establish the degree and type of causal relationships among endogenous and exogenous variables. Finding shows, All but one of the trade distortion measures produce a significant negative coefficient to trade balances, and the findings are robust with respect to the sample taken. Floating exchange rate has a positive coefficient but Statistically Insignificant at 1, 5 and 10 Percent Level. Thus in this study was unimportant determinant of Trade Balance. The findings suggest that Alternative approaches towards improving Trade Balance apart from increasing export performance and competitiveness of import competing firms need to be found. Increased investment in new technology and productive capacity is a further avenue through which will improve trade balance through increase in Export performances. Rapid liberalization was sometimes followed by large inflows of capital, currency appreciation and mounting trade deficits, but it often ended up with a crisis involving reversal of capital inflows, collapse and overshooting of exchange rates, sharp cuts of imports and a deep economic contraction. The study has identified a number of mitigating and enhancing measures by which significant negative impacts may be reduced and positive impacts may be enhanced in individual countries. Further studies should be directed toward assessing the impact of technological changes on trade liberalization.
Available in print form
Free trade, Tanzania
Mwambapa, N.R.O (2012), Analysis of trade liberalization and its impact on Tanzania trade balance, master dissertation, University of Dar es Salaam. available at(