Francis, B.S.Mwakalobo, A.Nguyahambi, A. M.2024-08-162024-08-162022Francis, B. S., Mwakalobo, A., & Nguyahambi, A. M. (2022). The Political Economy of Cluster Development Initiatives in Tanzania: Institutional Framework and Emerging Challenges. In Sustainable Education and Development–Making Cities and Human Settlements Inclusive, Safe, Resilient, and Sustainable: Proceedings of the Applied Research Conference in Africa (ARCA), 2021 10 (pp. 420-429). Springer International Publishing.DOI: https://doi.org/10.1007/978-3-030-90973-4_35https://repository.udom.ac.tz/handle/20.500.12661/4551Abstract available, full text article available at DOI: https://doi.org/10.1007/978-3-030-90973-4_35Purpose: This article aimed to examine the political economy of Cluster Development Initiatives on the institutional framework for CDIs in Tanzania context basing on the contractual arrangements of key actors, policy strategies, collaboration and institutional challenges under the guidance of the new institutional economic theory. Design/Methodology/Approach: The research used a cross-sectional design with a mixed approach through simple random sampling techniques to obtain 150 SMEs owners in the cluster of the regions of Singida, Mbeya and Morogoro. Interview, observation, survey and review of documents were used to get the required information. The quantitative and qualitative information were analyzed by descriptive statistics, ANOVA as well as analysis of the themes consecutively. Findings: It was found that the contractual arrangements of key actors were based on funding, training, technical expertise and linking clusters to various stakeholders. The difference in collaboration was not significant as well as significant with P value = 0.097and P value = 0.000 across regions and clusters respectively. Low government commitment, inadequate funding and low collaboration among cluster members were the major institutional challenges as there was inadequate political and institutional support to realize the intended objectives. Research limitation: The study focused on SMEs in clusters in the regions of Singida, Mbeya and Morogoro in Tanzania where CDIs were largely implemented. Practical Implication: The knowledge advanced by this study will help CDIs implementers and other stakeholders on the nature of political and institutional support, the collaboration of key stakeholders and the major institutional challenges. Social Implication: The knowledge advanced by this study will help policymakers to adjust SME development policies to provide special attention to CDIs issues as well as strengthen project capacity write up to attract funds. Originality/Value: The novelty of this study is on informing about the political economy of Cluster Development Initiatives particularly on the contractual arrangements of key actors, policy strategies, collaboration and institutional challenges under the guidance of the new institutional economic theory in Tanzania.enPolitical economyCluster develomentInstutional frameworkCluster Development InitiativesInstitutional economic theoryArticle