Private Sector

The Institutional Diagnostic Project case study on Bangladesh and Mozambique is an attempt to explain the paradox of sustainability of the former and the disappointed hopes of the growth of the latter.

This presentation reviews and summaries results from research done under RA4 research theme of our programme.

Outline of the presentation Objective, methodology and development of the project The synthesis volume and concluding chapters a) Identifying obstacles to development: economic perspective b) Identifying institutional obstacles: the role of politics c) Identifying institutional obstacles: state capacity and property…

Two central lessons can be drawn from the foregoing analysis. First, many institutional failures are traceable to the way politics functions. Therefore, any diagnosis or understanding of the impediments to a country’s long-term development that overlooks the country’s political economy…

After having examined the role of politics (in last chapter) in spurring or slowing down structural transformation and development, we are now ready to probe the issue of state capacity. This will complete our discussion of the role of governance-related…

In this chapter, the focus is on issues that involve politics. More specifically, we look at the role of political leadership and state autonomy in development. The institutions involved determine the quality of governance in a country, but they are…

Whether in the four case study countries or in the successful development stories of South Korea and Taiwan at the time when they were at a comparable level of income per capita, the issue of development consists of providing the…

This last part of the volume puts together the lessons learned from the in-depth case studies undertaken within the Institutional Diagnostic Programme (IDP), and the more cursory analysis of the success development stories of South Korea and Taiwan at about…

There are several reasons why development scholars should be interested in the case of Taiwan. As one author has written: ‘It once had a single dominant party following the Leninist model; it now has a competitive multiparty system. It was…

‘What would have been the conclusion of an institutional diagnostic of the development potential of South Korea conducted in the mid- or late-1970s, at a time when the country was still a low-income country, at roughly the same income level…

There are several reasons why Benin is an interesting country to study, and some of them have no doubt contributed to making it an aid darling for many donors. First, although it is made up of an extraordinarily varied mosaic…

At the core of the institutional diagnostic project is the idea that we can gain more knowledge about the role of institutions by undertaking in-depth country case studies than by carrying out broad quantitative exercises based on a large sample…

The preceding chapter defined the objective of the institutional diagnostics of each particular country and made explicit the concepts and analytical principles that need to be mobilised in order to conduct such an exercise. By providing a short description of…

The ‘institutions matter’ slogan appears today as a fundamental truth about development. Widely shared by the development community, including international organisations, it goes with the idea that the benefits of both market operations and state interventions are significantly conditioned by…

If there is absolutely no doubt that institutions matter for development, and for development policies and strategies in the first place, the crucial issue is knowing how they matter. After all, impressive economic development achievements have been observed despite the…

We place the research on the private sector supported by the Economic Development and Institutions (EDI) Programme into the context of the broader literature. The review illuminates the contribution of the EDI research in two areas that are at the…

Markets in low-income countries often display long tails of inefficient firms and signicant misallocation. This paper studies Rwandan coffee mills, an industry initially characterized by widespread inefficiencies that has recently seen a process of consolidation in which exporters have acquired…

Since 1993, Nepal implemented one of the most ambitious and comprehensive program of decentralization of forest management in the world, widely considered as a success story in terms of participatory management of natural resources. Using quasi-experimental methods, we first quantify…

We develop an approach to understand the role of autocratic land reforms to prevent democratic change. The autocrat confiscates and redistributes land in an attempt to secure his power, exploiting the endogenous social identities and loyalty in the population. The…

Islamic countries have increasingly been exposed to western culture, through the liberalization of their media markets and rise of transnational media networks. What is the consequence of this exposure on cultural and religious behavior, given potential clashes between western norms…

It is widely accepted that there are persistent performance differences (PPDs) among seemingly similar enterprises (Syverson, 2011). These differences are not only documented in developed markets (Syverson, 2004) but also in developing countries where they tend to be more pronounced…

Over the past 25 years, the government of Nepal implemented one of the most ambitious and comprehensive programs of decentralization of forest management in the world. This major institutional change resulted in the transfer of the management of almost 50%…

In this paper, we investigate how media owners react to changes in the political importance of vote choices — voting power — in different areas. Whereas “one person, one vote” is often considered the guiding principle of democracies, there is…

MOZAMBIQUE INSTITUTIONAL DIAGNOSTIC Chapter 9: The saga and limits of public financial management: The Mozambican case Abstract: At independence in 1975, the Frelimo government took over public administration from the colonial system and started to transform it. The public financial…

MOZAMBIQUE INSTITUTIONAL DIAGNOSTIC Chapter 4. The relative neglect of agriculture in Mozambique Abstract: This paper explores agricultural performance of Mozambique, its institutional weaknesses, and the underlying factors that underpin an unsatisfactory performance during many decades. We point to the role…

In a field experiment spanning the entirety of two Indian states, we randomized bureaucrats’ access to a mobile phone based e-management platform for India’s flagship workfare program. We randomized which levels of the administrative hierarchy received access to the app,…

The professional business services market of providers offering accounting, marketing, human resources, consulting, and legal services to other businesses is estimated to exceed US$5 trillion in annual revenue. However, few small firms in developing countries use these services. A recent…

Why do more small firms in developing countries not use the market for professional business services like accounting, marketing, and human resource specialists? Two key reasons may be that firms lack information about the availability of these services, and that…

Information barriers can prohibit trade. This paper empirically documents the existence of business-to-business information sharing between small firm traders in Lagos, Nigeria. Sharing information about availability of new products and styles is more common than sharing information about actual suppliers…

Abstract: What are the determinants of news media consumption? In this paper, we investigate whether it is determined by political motives. We build a new panel dataset on Indian publications at the city level between 2002 and 2017. We exploit…

Abstract: International donors and governments require contracting mechanisms that provide accountability in order to mitigate leakage and corruption in public infrastructure projects, especially when construction is outsourced to private sector contractors. This is an important goal because low-income countries spend…

Mozambique Institutional Diagnostic Chapter 12: Natural resources, institutions, and economic transformation in Mozambique Abstract: In the light of Mozambique’s natural resources boom—especially its large-scale investments in mining, oil, and gas—this paper analyses the prospects for the extractive industries to contribute…

Mozambique Institutional Diagnostic Chapter 8: Decentralization reforms in Mozambique The role of institutions in the definition of results Abstract: With the introduction of the economic reforms in the late 1980s, the opening up of the political arena and the end…

Mozambique Institutional Diagnostic Chapter 7: Health, development, and institutional factors The Mozambique case Abstract: The central aim of this text is to show the impact institutions have on the performance of the health sector in Mozambique. The text shows that…

Mozambique Institutional Diagnostic Chapter 6: The education sector in Mozambique From access to epistemic quality in primary education Abstract: From the early days of national independence in 1975, the central aim of the educational policy in Mozambique has been to…

This paper examines resilience of Chinese firms to the Covid-19 shock, and how it varied with a cluster index (measuring spatial agglomeration of firms in related industries) at the county level. Two data sources are used: entry flows of newly…

Bangladesh Institutional Diagnostic Chapter 6: Political economy of private bank governance in Bangladesh Chapter Overview List of tables, figures, and boxes Introduction Review of literature on the banking sector of Bangladesh Banking sector in Bangladesh: Performance and challenges Structure of…

This paper investigates how women’s promotions in the workplace affect bargaining in the household. I exploit the design of a promotion programme for women in 27 Bangladeshi garment factories, by comparing women who were quasi-randomly selected for the programme to…

Abstract: We report the results of a field experiment designed to promote women to supervisory positions in Bangladesh’s garment factories, with which participating factories have little prior experience. We show that formal diagnostic tests lead factories to choose candidates that…

Abstract: This paper investigates how social norms related to land conversion may evolve to accommodate greater scarcity, by taking advantage of data collected in the Equateur Province in the Democratic Republic of Congo as well as historical events that introduced…

This introductory chapter the the Benin Institutional Diagnostic provides a contextual overview to the publication under five main topics: ‘Institutions matter’ How institutions matter in development policy today Searching for evidence on the quality of institutions and development Institutional diagnostic…

This EDI Policy Brief provides an accessible summary of key insights and findings that are presented in the EDI Working Paper on “Community Origins of Industrial Entrepreneurship in Pre-Independence India.” It derives from a case study on the role community networks in…

This EDI Working Paper derives from research undertaken in the Case Study on ‘Community networks and industrial entrepreneurship in India and China’ by Dilip Mookherjee et al. The authors argue that community networks played an important role in the emergence of…

Gianmarco León on pay-for-performance (P4P), which has been shown to be effective in job performance in both private and public organizations. The research examines how incentives affect performance when they are implemented across multiple layers of an organization – from…

Michael O’ Sullivan from the World Bank presents research on “Relaxing credit constraints and tenure insecurity in imperfect markets.” The project motivation arises from recognition that in the absence of well-functioning markets for land, credit and insurance, farming households are…

This EDI Policy Brief provides an accessible summary of key insights and findings that are presented in the EDI Working Paper on “Community networks and the growth of private enterprise in China.” It derives from a case study on the…

This paper identifies and quantifies the role played by birth-county-based community networks in the growth of private enterprise in China. We develop a network-based model that generates predictions for the dynamics of firm entry, concentration, and firm size across birth counties with varying…

Tanzania Institutional Diagnostic Chapter 8: Synthesis This chapter provides a synthesis of information and arguments developed in the first seven chapters of the Tanzania Institutional Diagnostic. Chapter outline Part 1.  The basic institutional constraints on Tanzanian development The main challenges…

Tanzania Institutional Diagnostic Chapter 1: Reflections on the political and economic development of Tanzania Chapter outline A short account of the political history of Tanzania The colonial era The German colonisation The British mandate on Tanganyika Independence Forging a nation: the…

François Bourguignon and Sam Wangwe provide an introduction to the analysis produced for the Tanzania Institutional Diagnostic. The authors outline three approaches have been developed to identify the institutional factors hindering development or ways of remedying specific factors: historical case studies;…

A presentation by Aprajit Mahajan (UC Berkeley), Shekhar Mittal (UC Berkeley) and Ofir Reich (formerly CEGA) This presentation was part of the convening event hosted by CEGA at the University of California, Berkeley, in August 2018. Read a summary of…

A presentation by Ernesto Dal Bó and Federico Finan, University of California, Berkeley This presentation was part of the convening event hosted by CEGA at the University of California, Berkeley, in August 2018. Read a summary of the event.  

A presentation by Gianmarco León (with Erika Deserrano and Philipp Kastrau) This presentation was part of the convening event hosted by CEGA at the University of California, Berkeley, in August 2018. Read a summary of the event.

A presentation by Edward Miguel, University of California, Berkeley This presentation was part of the convening event hosted by CEGA at the University of California, Berkeley, in August 2018. Read a summary of the event.

Where does the evidence stand on institutions, development and growth? This paper explores the empirical evidence on institutions and growth. The empirical evidence on institutions ranges from historical studies to econometric analyses, with different studies making very different theoretical commitments…

Institutions are commonly defined as the rules of the game that societies play which in shared understanding act as constraints on and guidelines for economic performance. This paper provides an overview of case studies from the two largest developing countries,…

A next step forward in examining economic growth and institutions is examining the frequency, timing and magnitude of “growth episodes”—discrete accelerations and de-celerations in medium to long run growth.  This will be challenging as to the extent that very long-run…

The paper surveys the very heterogeneous economic literature on the scope and limits of efforts to match institutional constraints and needs, on the one hand, and infrastructure policy and project designs, on the other, to increase the odds of improving…

This paper reviews and synthesizes current knowledge on the role of institutions on firm financing and growth in developing countries. First, the paper presents stylized facts on the different institutional constraints under which firms in developing countries operate. Next, the…

This paper takes stock of and provides a critical review of several literatures, notably the theoretical and empirical work on finance and growth and studies on the determinants of financial development. These two literatures are linked as the sustainable expansion…

This paper provides a selective review of evidence from labor markets in low-income countries. The aim is to synthesize this literature to consolidate what is known about the key drivers of worker outcomes (including those of micro-entrepreneurs), firm behavior, and the interaction between…

The paper discusses Marx’s view on the relationship between technological change and institutional change as presented in the famous preface to A Contribution to the Critique of Political Economy.  What Marx meant by a contradiction between the base and the…

The paper focuses on the role played by Trade Related Institutions (TRIs) in shaping trade flows and their development impact in low income countries and how these TRIs are shaped by international trade. Three types of TRIs are examined: i)…

I ask what clues do historical and contemporary data provide for theory building and empirical work to enhance our understanding of the relationship between institutions and inequality. The survey begins with a brief overview of the role of institutions in…

This survey examines the relationship between community networks and migration. Adding networks to the Roy model, the workhorse model of migration in economics, is shown to reconcile key stylized facts on migration with the theory. This addition is supported by…

Louis Kasekende (Deputy Governor, Bank of Uganda) discusses the role of formal and informal institutions in the financial sector. He refers to recent EDI path-finding research papers to focus on the transition from informal to formal institutions and its effect…