Leadership and Managerial Mismatch as a Contributing Factor in the Failure of Public Industrial Projects in Tanzania

Abstract

By the early 1980s—a period termed as the period of de-industrialization in
Tanzania, or the ‘lost decade’—the people of Ugweno in Mwanga district in
Kilimanjaro region, Tanzania, tried to industrialize particularly in ceramics. Three
villages: Raa, Rangaa and Kisanjuni had two fully equipped industrial sites to
produce clay vessels and bricks. An attempt to explain the reasons for the failure
of such well-conceived and costly projects is the gist of this article. Using a case
study approach, the article attempts to explain the performance of the said industry
based on the principal-agent model. Findings suggests that moral hazard, rather
than adverse selection, explains the dismal results in the performance of the said
public investments. One salient observation is that in a public-owned project, the
roles of politicians (as principals) need to be reasonably balanced with the roles of
the managers of the public concerns (the agents) for the success of projects. The
major finding is that the failure of the two projects was due to too much political
control. Thus, there is a need to redefine the roles and relations between leadership
and management to ensure the success of any industrialization strategy.