Podcast Summary: Natural Resource Revenue in Tanzania – Justin Sandefur

Podcast: The CGD Podcast
Host: Rajesh Merchandani (Center for Global Development)
Guest: Justin Sandefur, CGD Research Fellow
Date: March 31, 2015

Episode Overview

This episode centers on the pressing question: How should developing countries, specifically Tanzania, manage the anticipated influx of natural resource revenues from recently discovered offshore natural gas? Justin Sandefur discusses CGD’s innovative project in Tanzania, which seeks the opinions of ordinary Tanzanians through “deliberative polling” to inform smarter policymaking around natural resource wealth.

Key Discussion Points and Insights

The Magnitude of the Natural Gas Discovery

• Tanzania’s 2012 Offshore Natural Gas Find:
  • Significant in scale—optimistically, annual revenues could match the median household’s annual income in Tanzania.
  • [00:49] Justin Sandefur:

    “This is an amount of natural gas...almost equivalent to the median household income of typical Tanzanian in terms of per capita annual flows.”

• Contextualizing the Numbers:
  • Median income is roughly $120–$130 per capita, and government spending is about the same per person.
  • [01:26] Sandefur breaks it down:

    “Optimistically, you could be talking about similar amounts of money coming from natural gas revenues over...the next several years.”

Revenue Allocation Options for Tanzania

• Standard Government Spending:

  • Money goes into government coffers for typical public expenditures—social services, infrastructure, civil servant pay.
  • [02:44] Sandefur explains:

    “The big question marks are around...savings and smoothing this revenue out over time. Natural gas is a depletable resource...So the typical advice from economists is that you convert this kind of subsoil asset into a permanent above ground asset.”

• Saving vs. Spending Models:

  • Infrastructure investment now, direct citizen dividends (like Alaska), or sovereign wealth funds (like Norway).
  • [03:36] Host Rajesh lists options:

    “Do you spend it on infrastructure now? Do you give it to people as a dividend...what Norway has done and save...?”

Natural Resource Curse & Governance

• Economic Risks:
  • “Dutch disease”—currency appreciation, loss of competitiveness (economic component).
  • [03:48] Sandefur:

    “From a technocratic point of view, we...know how to deal with it...But then there's...political economy...corruption. That this breaks the link of accountability between government...and citizens.”

• Political Economy Risks:
  • Loss of accountability and risk of corruption when government receives large, independent revenues.

Deliberative Polling Project in Tanzania

Rarity of Public Consultation

• Unusual to Involve Ordinary Citizens:
  • [05:02] Sandefur notes:

    “It's quite unusual...Managing a big natural resource find is complex stuff. I'm not really sure that ordinary Tanzanian should be weighing in on this.”

Project Structure and Methodology

• Large-scale Public Opinion Polling:

  • 2,000 Tanzanians surveyed across 20 districts—households picked randomly for true representativeness.
  • [07:13] Sandefur:

    “Pick 20 districts at random. Pick villages...Pick households at random. So this is really a truly representative cross section...most people will be living under a dollar a day.”

• Deliberative Polling Mechanism:

  • Developed by Stanford’s Jim Fishkin; combines initial polling with focused education sessions.
  • [05:35] Sandefur:

    “Bring your poll respondents together, provide them with information...focus group style conversations...People spend a couple of days together really learning this issue.”

• Comprehensive Survey Content:

  • Ranges from awareness of the gas discovery to preferences on savings vs. spending, transparency, and governance.
  • [07:49] Sandefur:

    “A lengthy kind of hour longish survey...how much should the government be saving, how much should it be spending on education, on health and so on...Should local government be involved?”

National Deliberative Event

• Bringing 400 Citizens to Dar es Salaam:

  • Two-day event with exposure to experts, politicians, debates, and media; followed by another round of polling.
  • [09:05] Sandefur:

    “We will have 400 people...who will come together to Dar es Salaam to spend two days talking about these issues.”

  • [09:48] Merchandani jokes:

    “It could be this sort of fantastic, colorful circus almost.”

  • [09:53] Sandefur:

    “I'm hoping for not too much of a circus, but fingers crossed.”

• Expert and Political Exposure:

  • Mix of technocrats, academics, think-tankers, government and opposition politicians.
  • [10:12] Sandefur:

    “Some...will be fairly technocratic...others will be...outspoken politicians...some voices in opposition...support pushing these resources out more directly...distributing...directly to people...bypassing government channels...”

Political and Social Impact

• Rare Public Opinion Data in Tanzania:

  • [11:27] Sandefur:

    “As in many low income countries, there's just not a lot of public opinion polling out there...So this will be kind of a rare injection of...high quality public opinion data into the...policy conversation...”

• Potential for Policy Influence:

  • [12:04] Sandefur:

    “We hope to be able to see how politicians...respond to people's informally...to assess...to which politicians update their policy views in response to this injection of information.”

• Challenge of Populism and Hopes for Reasoned Debate:

  • [12:33] Sandefur:

    “Populism is our biggest fear here...Part of what we hope to do...is to kind of show politicians how the Tanzanian electorate is able...to have a reasoned debate over the substantive issues here...raise the level of the conversation...”

Notable Quotes & Memorable Moments

• Quantifying the Natural Gas Windfall:
  [00:49] Sandefur:

  "This is an amount of natural gas which, with mildly optimistic forecasts, would be almost equivalent to the median household income of typical Tanzanian in terms of per capita annual flows."

• On Including Ordinary People:
  [05:02] Sandefur:

  “It's quite unusual...Managing a big natural resource find is complex stuff. I'm not really sure that ordinary Tanzanian should be weighing in on this.”

• The “Circus” of Deliberation:
  [09:48] Merchandani:

  “It could be this sort of fantastic, colorful circus almost.”
  [09:53] Sandefur:
  “I'm hoping for not too much of a circus, but fingers crossed.”

• Populism vs. Informed Debate:
  [12:33] Sandefur:

  “Populism is our biggest fear here...to kind of show politicians how the Tanzanian electorate is able, we hope...to have a reasoned debate...”

Timestamps for Important Segments

• Background on Tanzania’s Natural Gas Discovery: 00:40–02:28
• Global Options for Resource Revenue Allocation: 02:44–03:48
• Risks of Resource Booms (Resource Curse): 03:48–04:56
• Public Involvement in Policy (Deliberative Polling): 05:02–07:13
• Survey Design and Sample Selection: 07:13–08:17
• National Deliberative Event Plans: 09:05–10:12
• Political Context—Election Year: 11:02–11:27
• Policy Hopes and Risks (Populism, Debate): 12:33–13:38

Conclusion

Justin Sandefur and CGD’s project in Tanzania aims to bridge the gap between technical policy debates and the voices of ordinary citizens by fostering informed, representative discussion about the country's future natural resource revenue. The experiment’s outcome could influence how both policy elites and the public approach large-scale resource management in fragile democracies.