Direct Support to Private Firms : Evidence on Effectiveness

Direct Support to Private Firms : Evidence on Effectiveness

Governments use a variety of instruments to provide direct support to private enterprises. These include the provision of finance (subsidized and/or directed credit) and business development services (management and marketing advice to small busine...

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Bibliographic Details
Main Authors: Batra, Geeta, Mahmood, Syed
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2014
Subjects:
ADMINISTRATIVE COSTS
AUTONOMY
BANK PROCEDURES
BANKS
BENEFIT ANALYSIS
BUSINESS DEVELOPMENT
BUSINESS DEVELOPMENT SERVICES
BUSINESS PLANS
CAPITAL MARKETS
CAPITALIZATION
COLLATERAL
COMMERCIAL FUNDING
COMPARATIVE ADVANTAGE
CONSULTING SERVICES
CONTRACT ENFORCEMENT
COST EFFECTIVENESS
COST- BENEFIT ANALYSES
COST-BENEFIT ANALYSES
DEBT
DECENTRALIZATION
DEMONSTRATION EFFECTS
DEPRECIATION
DEVELOPED COUNTRIES
DIRECT FINANCING
ECONOMIC CONDITIONS
ECONOMIC IMPACT
ECONOMICS
EMPLOYMENT
ENVIRONMENTAL MANAGEMENT
EQUITY INVESTMENTS
EXPENDITURES
FARMS
FINANCIAL INSTITUTIONS
FINANCIAL MARKETS
FINANCIAL PERFORMANCE
FINANCIAL SECTOR
FINANCIAL SERVICES
FINANCIAL SYSTEMS
GOVERNMENT INTERVENTION
HARD BUDGET CONSTRAINTS
HUMAN RESOURCE MANAGEMENT
INCENTIVE SYSTEMS
INCOME
INFLATION
INFORMATION SYSTEMS
INSTITUTIONAL DEVELOPMENT
INTEREST RATES
LAWS
LEGAL FRAMEWORK
LENDING OPERATIONS
LEVIES
LIQUIDITY
LIVING STANDARDS
LOCAL ENTERPRISES
MANDATES
OPERATING COSTS
OPERATING EXPENSES
POLICY ENVIRONMENT
POLICY RESEARCH
POVERTY ALLEVIATION
PRIVATE SECTOR
PRODUCTION PROCESSES
PRODUCTIVITY
PROFITABILITY
PROGRAMS
PUBLIC POLICY
RESOURCE ALLOCATION
RETAINED EARNINGS
RETURN ON ASSETS
RETURN ON EQUITY
SAVINGS
SELECTION BIAS
TECHNICAL ASSISTANCE
TECHNOLOGY ADOPTION
TRAINING COURSES
TRAINING PROGRAMS
TRANSACTION COSTS ENTERPRISE DEVELOPMENT
PRIVATE ENTERPRISES
FINANCIAL INSTRUMENTS
SUBSIDIES
ACCESS TO CREDIT
BUSINESS ENVIRONMENT
BUSINESS ECONOMICS
SERVICING
MANAGEMENT ASSISTANCE
MARKETING ASSISTANCE
SMALL BUSINESS FINANCE
AGRICULTURAL EXTENSION
TRAINING ASSISTANCE
TECHNOLOGY DEVELOPMENT
POLICY FRAMEWORK
LEGAL & REGULATORY FRAMEWORK
JUDICIAL PROCESS
INFRASTRUCTURE
INVESTMENT INCENTIVES
ENTERPRISE DEVELOPMENT
TRANSACTION COSTS
Online Access:http://documents.worldbank.org/curated/en/2003/11/2819076/direct-support-private-firms-evidence-effectiveness
http://hdl.handle.net/10986/17907
Description
Summary:Governments use a variety of instruments to provide direct support to private enterprises. These include the provision of finance (subsidized and/or directed credit) and business development services (management and marketing advice to small businesses, agricultural extension services, support for enterprise level training and support to technology development). These interventions are distinct from those that support enterprises indirectly by establishing a policy and legal environment conducive to enterprise development. How effective have these direct support schemes been? This paper attempts to provide some answers to this question by surveying the available literature on the effectiveness of direct support interventions. Where available, impact evaluations suggest that the performance has been mixed at best. The evidence indicates that active intervention does not work unless the basic environment for private sector development is sound. Public policy thus needs to focus on creating an enabling environment, key elements of which include a sound legal and judicial system which supports low-cost contract enforcement, good infrastructure, a policy playing field which is level in terms of ease of registration, taxes and investment incentives for all enterprises-large and small, domestic and foreign.

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