Legal regulation of prices in Tanzania : an examination of the Regulation of Prices Act 1973 as a tool of social change and development

Abstract

Drawing mainly from the Tazanian experience this study attempts to review the principal issues in the legal regulation of prices, by identifying both the general and specific importance of law in this respect. The position I shall present is that legal control is both necessary and desirable for the welfare and social development of the people. The key issue is whether the market-place will perform its function satisfactory: Will it produce socially desirable results? If it will not, why will it not? And will legal regulation help to do the job a little better? In an attempt to answer some of these questions, first of all, outline the basic issues raised by the study in the first Chapter. Then I examine the general case for price controls - the theory about the controls, the motives and reasons for their imposition and the manner in which they are effected in different economic systems. This is done in Chapter Two. Relying most on the available literature on the regulatory process, this Chapter also looks at the relationship between law and economic regulation and concludes that the effectiveness of law depends on the existence of a conducive socio-economic environment. In Chapter Three I describe the past record of price control laws in Tanzania. I conclude that despite the failure in the past, the controls still constitute an important policy instrument in the transition to socialism. In Chapters Four and Five I describe the manner in which the current regulations are implemented and the problems encountered. I conclude that the operational performance of the controls is constrained by internal and external influences on the economic and political life of the country. In the concluding Chapter I assess the impact of the controls: Do the controls work? Do people buy goods at the controlled prices? Why today the controls are almost popularly accepted as worthwhile? I conclude that while there may be no measurable economic gains derived by consumers, the controls have a stabilising effect on the social and political front. In the final section I argue that the future success of the legislation depends on creating a correspondence between the economic structures and the control system. What makes the controls ineffective is not so much defects in the law but the contradictions between the orientation of and functioning of the economic system and the ideological commitment