Tax Bargains in Poorly Regulated Natural Resource Rich Countries: Lobbying, Corruption and the Shaping of Petrol- and Tax Policies in Tanzania

Political institutions shape interest groups´ lobbying strategies. Comparing the introduction of the 2014 VAT act and the 2015 Petroleum act in Tanzania, we find that a large number of interest groups lobbying resulted in outcomes that are unpredictable and sub-optimal from a revenue perspective. As an institutionalized, dominant party state it should be assumed in Tanzania that once government is united, there is very little room for lobbying parliament. However, as this paper shows, the dominant governing party (CCM) has limited abilities to instruct individual MPs who prove to be receptive when confronted by an increasingly professional group of lobbyists. Our analysis of the various actors involved in shaping the VAT and Petroleum acts at various stages in the policy process illustrates the hybrid character of political institutions and lobbying. We show that business interests both employ insider and outsider lobbying schemes, and that the distinction between formal and informal veto players are blurred in a context of increasingly more interconnected political and economic elites.