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Case study (8) Focus on Social Safety Net


Elderly people to be covered by pension

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This article highlights a scheme in Tanzania where the government provides a social pension for those people aged 60 and above. This section of the population is not provided for financially and, as a consequence, is often condemned to live in extreme poverty.

  1. Is the provision of a pension scheme, such as that described in the article, an example of a market oriented or an interventionist growth and development strategy? Explain your answer.
  2. Describe what is meant by market failure.
  3. To what extent do you think that the provision of a pension scheme is an attempt to resolve a case of market failure? Explain your answer.
  4. Identify problems the government of Tanzania will face when it extends such a pension scheme throughout the whole of the country.
  5. Examine the effect of this pension scheme on the informal sector within the country.