basic unit of production, but also a social entity that provided social space for people’s participation in their own development processes. 78. A socialist approach – African socialism – based on the notion of Ujamaa became the ideological basis guiding subsequent economic policies. Through the Ujamaa villages, Government sought to channel resources to local areas as a means of improving the well-being of its people. Purposeful measures were undertaken to invest public resources in human development, particularly in health, education and water supply. During this period, Tanzania made considerable achievements in human development (Wangwe, 2011). 79. In the health sector, a national health policy was formulated in the early 1970s with the overall objective of providing comprehensive basic health services to all citizens equitably, and as close to the people as possible. Health policy implementation was supported by many donors. By 1974/75, almost 9 per cent of total government expenditure was being channeled into the health sector (UTR: 1974/05). The result was the rapid physical expansion of health care facilities. 80. In the field of education, Tanzania took deliberate measures to transform the pyramidal structure inherited from the colonial system. In 1960, only one quarter of the total school age population had been enrolled in primary schools, and of the total adult population, only about 10 per cent were literate. By 1984, however, universal primary education had been more or less achieved - with gender parity - while adult literacy had increased from 10 per cent in 1961 to 60 per cent in 1981, and by 1987, had reached 85 per cent (URT 1987). 81. The implementation of the Arusha Declaration was supported by many Western donor agencies, including the World Bank, as it coincided with a global paradigm shift that advocated a pro-poor development agenda (Meena, 2008). According to Meena, in the 1970s, the total volume of foreign aid rose dramatically from US $51.2 million in 1970 to a peak of US $ 701.9 million in 1981. Total aid as a share of GDP rose from an average of 7.2 per cent in the period 1970-73 to 10.9 per cent between 1974 and 1976. 82. However, both the pro-poor approach of the seventies and the Ujamaa philosophy were short-lived because of the subsequent economic crisis. Towards the end of the 1970s and in the early 1980s, Tanzania experienced a deep economic crisis in which major macroeconomic variables were out of balance: high inflation rates, budget deficits, balance of payment problems, shortage of basic goods, and inefficiency in public enterprises. This, in turn, affected State capacity to manage and sustain social services, particularly health and education. 83. The crisis depicted a disintegration of the post-independence development-provider welfare state. Government ultimately yielded to pressure to adopt SAPs under the looming risk of economic collapse. Initially, the authorities reacted with unsuccessful home-grown adjustment efforts. In 1986, the Tanzanian authorities finally agreed to the first stabilisation and structural adjustment programme (SAP), guided by the World Bank and International Monetary Fund (IMF). Structural Adjustment Programmes 84. In 1986, Government signed a standby agreement with the International Monetary Fund and a structural adjustment programme agreement with the World Bank. The subsequent Economic Recovery Programme (ERP) sought to move the country from partial liberalisation - depicting the home-grown reform programmes - into full-fledged liberalisation and stabilisation. To this end, the ERP focused on doing away with price controls, introducing market reforms, exchange rate liberalisation, fiscal reforms, and public sector downsizing - laying off large numbers of workers from the government sector and state-owned enterprises. In 1989, reforms entered a second phase known as ERP II (1989-1991). The new reforms maintained the focus on trade liberalisation, exchange rate liberalisation, and macroeconomic stability. Reforms were also extended to include the banking system, agricultural marketing, government administration, and the civil service, as well as social service sectors. The main critique of ERP is that it did not address the social dimensions of the economic crisis. 85. In 1997, the Tanzanian Government produced its first National Poverty Eradication Strategy. This strategy aimed to eradicate absolute poverty and attain a poverty-free society with improved social conditions and general welfare, by the year 2025. Poverty reduction strategy papers culminated in the adoption of Vision 2025 and the 38