How Can We Learn Whether Firm Policies Are Working in Africa? Challenges (and Solutions?) for Experiments and Structural Models

Firm productivity is low in African countries, prompting governments to try a number of active policies to improve it. Yet despite the millions of dollars spent on these policies, we are far from a situation where we know whether many of them are y...

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Main Author:	McKenzie, David
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	BUSINESS CLIMATE BUSINESS PLAN BUSINESS PLANNING BUSINESS SERVICES BUSINESSES CAPACITY BUILDING CERTIFICATE COMMODITY COMPETITIVENESS COMPETITORS CORPORATION CREDIT LINE CREDIT RISK DATA COLLECTION DECISION-MAKING ELECTRICITY EMPLOYMENT EMPLOYMENT CREATION ENTERPRISE DEVELOPMENT ENTERPRISE SURVEY ENTERPRISE SURVEYS ENTREPRENEURS EQUIPMENT EXCESS DEMAND EXPORT PROMOTION EXPORT SECTOR EXTERNALITIES FINANCIAL CAPITAL FIRMS GRANT PROGRAMS IMPACT ASSESSMENTS JOB CREATION KEY PERFORMANCE INDICATORS LARGE ENTERPRISES LEARNING LEASING LITERACY LOAN MACROECONOMIC STABILITY MANUFACTURING MARKETING MATCHING GRANTS MEDIUM ENTERPRISE MEDIUM SCALE ENTERPRISE MICROENTERPRISES MICROFINANCE MICROFINANCE PROGRAM OPEN ACCESS PERFORMANCE INDICATORS PRIVATE SECTOR PRIVATE SECTOR ASSISTANCE PRIVATE SECTOR DEVELOPMENT PRODUCTION FUNCTIONS PRODUCTIVITY PROGRAMS REGULATORY BURDEN RESULT RESULTS RETAIL TRADE SCALE ENTERPRISE SMALL ENTERPRISE SMALL ENTERPRISES SMALL FIRMS SME SME DEVELOPMENT SME FINANCE SME POLICIES SME PROJECT SME PROJECTS SUPPLIER SUPPLIERS TECHNICAL ASSISTANCE TECHNICAL TRAINING TIME FRAME TIME PERIODS TRAINING COURSES USES WEB
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110412081305 http://hdl.handle.net/10986/3398

id	okr-10986-3398
recordtype	oai_dc
spelling	okr-10986-33982021-04-23T14:02:09Z How Can We Learn Whether Firm Policies Are Working in Africa? Challenges (and Solutions?) for Experiments and Structural Models McKenzie, David BUSINESS CLIMATE BUSINESS PLAN BUSINESS PLANNING BUSINESS SERVICES BUSINESSES CAPACITY BUILDING CERTIFICATE COMMODITY COMPETITIVENESS COMPETITORS CORPORATION CREDIT LINE CREDIT RISK DATA COLLECTION DECISION-MAKING ELECTRICITY EMPLOYMENT EMPLOYMENT CREATION ENTERPRISE DEVELOPMENT ENTERPRISE SURVEY ENTERPRISE SURVEYS ENTREPRENEURS EQUIPMENT EXCESS DEMAND EXPORT PROMOTION EXPORT SECTOR EXTERNALITIES FINANCIAL CAPITAL FIRMS GRANT PROGRAMS IMPACT ASSESSMENTS JOB CREATION KEY PERFORMANCE INDICATORS LARGE ENTERPRISES LEARNING LEASING LITERACY LOAN MACROECONOMIC STABILITY MANUFACTURING MARKETING MATCHING GRANTS MEDIUM ENTERPRISE MEDIUM SCALE ENTERPRISE MICROENTERPRISES MICROFINANCE MICROFINANCE PROGRAM OPEN ACCESS PERFORMANCE INDICATORS PRIVATE SECTOR PRIVATE SECTOR ASSISTANCE PRIVATE SECTOR DEVELOPMENT PRODUCTION FUNCTIONS PRODUCTIVITY PROGRAMS REGULATORY BURDEN RESULT RESULTS RETAIL TRADE SCALE ENTERPRISE SMALL ENTERPRISE SMALL ENTERPRISES SMALL FIRMS SME SME DEVELOPMENT SME FINANCE SME POLICIES SME PROJECT SME PROJECTS SUPPLIER SUPPLIERS TECHNICAL ASSISTANCE TECHNICAL TRAINING TIME FRAME TIME PERIODS TRAINING COURSES USES WEB Firm productivity is low in African countries, prompting governments to try a number of active policies to improve it. Yet despite the millions of dollars spent on these policies, we are far from a situation where we know whether many of them are yielding the desired payoffs. This paper establishes some basic facts about the number and heterogeneity of firms in different sub-Saharan African countries and discusses their implications for experimental and structural approaches towards trying to estimate firm policy impacts. It shows that the typical firm program such as a matching grant scheme or business training program involves only 100 to 300 firms, which are often very heterogeneous in terms of employment and sales levels. As a result, standard experimental designs will lack any power to detect reasonable sized treatment impacts, while structural models which assume common production technologies and few missing markets will be ill-suited to capture the key constraints firms face. Nevertheless, the author suggests a way forward which involves focusing on a more homogeneous sub-sample of firms and collecting a lot more data on them than is typically collected. 2012-03-19T18:01:46Z 2012-03-19T18:01:46Z 2011-04-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110412081305 http://hdl.handle.net/10986/3398 English Policy Research working paper ; no. WPS 5632 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Africa Africa Africa
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	BUSINESS CLIMATE BUSINESS PLAN BUSINESS PLANNING BUSINESS SERVICES BUSINESSES CAPACITY BUILDING CERTIFICATE COMMODITY COMPETITIVENESS COMPETITORS CORPORATION CREDIT LINE CREDIT RISK DATA COLLECTION DECISION-MAKING ELECTRICITY EMPLOYMENT EMPLOYMENT CREATION ENTERPRISE DEVELOPMENT ENTERPRISE SURVEY ENTERPRISE SURVEYS ENTREPRENEURS EQUIPMENT EXCESS DEMAND EXPORT PROMOTION EXPORT SECTOR EXTERNALITIES FINANCIAL CAPITAL FIRMS GRANT PROGRAMS IMPACT ASSESSMENTS JOB CREATION KEY PERFORMANCE INDICATORS LARGE ENTERPRISES LEARNING LEASING LITERACY LOAN MACROECONOMIC STABILITY MANUFACTURING MARKETING MATCHING GRANTS MEDIUM ENTERPRISE MEDIUM SCALE ENTERPRISE MICROENTERPRISES MICROFINANCE MICROFINANCE PROGRAM OPEN ACCESS PERFORMANCE INDICATORS PRIVATE SECTOR PRIVATE SECTOR ASSISTANCE PRIVATE SECTOR DEVELOPMENT PRODUCTION FUNCTIONS PRODUCTIVITY PROGRAMS REGULATORY BURDEN RESULT RESULTS RETAIL TRADE SCALE ENTERPRISE SMALL ENTERPRISE SMALL ENTERPRISES SMALL FIRMS SME SME DEVELOPMENT SME FINANCE SME POLICIES SME PROJECT SME PROJECTS SUPPLIER SUPPLIERS TECHNICAL ASSISTANCE TECHNICAL TRAINING TIME FRAME TIME PERIODS TRAINING COURSES USES WEB
spellingShingle	BUSINESS CLIMATE BUSINESS PLAN BUSINESS PLANNING BUSINESS SERVICES BUSINESSES CAPACITY BUILDING CERTIFICATE COMMODITY COMPETITIVENESS COMPETITORS CORPORATION CREDIT LINE CREDIT RISK DATA COLLECTION DECISION-MAKING ELECTRICITY EMPLOYMENT EMPLOYMENT CREATION ENTERPRISE DEVELOPMENT ENTERPRISE SURVEY ENTERPRISE SURVEYS ENTREPRENEURS EQUIPMENT EXCESS DEMAND EXPORT PROMOTION EXPORT SECTOR EXTERNALITIES FINANCIAL CAPITAL FIRMS GRANT PROGRAMS IMPACT ASSESSMENTS JOB CREATION KEY PERFORMANCE INDICATORS LARGE ENTERPRISES LEARNING LEASING LITERACY LOAN MACROECONOMIC STABILITY MANUFACTURING MARKETING MATCHING GRANTS MEDIUM ENTERPRISE MEDIUM SCALE ENTERPRISE MICROENTERPRISES MICROFINANCE MICROFINANCE PROGRAM OPEN ACCESS PERFORMANCE INDICATORS PRIVATE SECTOR PRIVATE SECTOR ASSISTANCE PRIVATE SECTOR DEVELOPMENT PRODUCTION FUNCTIONS PRODUCTIVITY PROGRAMS REGULATORY BURDEN RESULT RESULTS RETAIL TRADE SCALE ENTERPRISE SMALL ENTERPRISE SMALL ENTERPRISES SMALL FIRMS SME SME DEVELOPMENT SME FINANCE SME POLICIES SME PROJECT SME PROJECTS SUPPLIER SUPPLIERS TECHNICAL ASSISTANCE TECHNICAL TRAINING TIME FRAME TIME PERIODS TRAINING COURSES USES WEB McKenzie, David How Can We Learn Whether Firm Policies Are Working in Africa? Challenges (and Solutions?) for Experiments and Structural Models
geographic_facet	Africa Africa Africa
relation	Policy Research working paper ; no. WPS 5632
description	Firm productivity is low in African countries, prompting governments to try a number of active policies to improve it. Yet despite the millions of dollars spent on these policies, we are far from a situation where we know whether many of them are yielding the desired payoffs. This paper establishes some basic facts about the number and heterogeneity of firms in different sub-Saharan African countries and discusses their implications for experimental and structural approaches towards trying to estimate firm policy impacts. It shows that the typical firm program such as a matching grant scheme or business training program involves only 100 to 300 firms, which are often very heterogeneous in terms of employment and sales levels. As a result, standard experimental designs will lack any power to detect reasonable sized treatment impacts, while structural models which assume common production technologies and few missing markets will be ill-suited to capture the key constraints firms face. Nevertheless, the author suggests a way forward which involves focusing on a more homogeneous sub-sample of firms and collecting a lot more data on them than is typically collected.
format	Publications & Research :: Policy Research Working Paper
author	McKenzie, David
author_facet	McKenzie, David
author_sort	McKenzie, David
title	How Can We Learn Whether Firm Policies Are Working in Africa? Challenges (and Solutions?) for Experiments and Structural Models
title_short	How Can We Learn Whether Firm Policies Are Working in Africa? Challenges (and Solutions?) for Experiments and Structural Models
title_full	How Can We Learn Whether Firm Policies Are Working in Africa? Challenges (and Solutions?) for Experiments and Structural Models
title_fullStr	How Can We Learn Whether Firm Policies Are Working in Africa? Challenges (and Solutions?) for Experiments and Structural Models
title_full_unstemmed	How Can We Learn Whether Firm Policies Are Working in Africa? Challenges (and Solutions?) for Experiments and Structural Models
title_sort	how can we learn whether firm policies are working in africa? challenges (and solutions?) for experiments and structural models
publishDate	2012
url	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110412081305 http://hdl.handle.net/10986/3398
_version_	1764386919130595328

How Can We Learn Whether Firm Policies Are Working in Africa? Challenges (and Solutions?) for Experiments and Structural Models

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