Protection and the Own-Funds Window in Tanzania: An Analytical Framework and Estimates of the Effects of Trade Liberalization

A simple partial equilibrium framework is employed to examine the implications of administered protection in Tanzania, against the background of the country's parallel exchange market and the establishment of the own-funds and open general licence (OGL) facilities for authorizing imports. Estimates are presented of the range of possible adjustments in the real exchange rate and trade flows following an hypothesized unification of the import licensing system and sufficient liberalization of the OGL facility to eliminate own-funds imports and export smuggling.