In this paper, we will present a multi-agent simulation model to investigate the relation
between intergovernmental transfers and basic education in Tanzania. We have conducted various
simulations to uncover the relation between tax and education enrollment rates, as well as between
teacher payments and education quality. The results revealed that if tax rates were set progressively at
different levels, more children would be enrolled in primary schools in future. We also observed an
increase in education quality if the government decides to pay more salaries to teachers in rural poor
areas. These results will be elaborated in more detail. Furthermore, based on the results, several
recommendations will be presented.