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How Can We Learn Whether Firm Policies are Working in Africa? : Challenges (and Solutions?) for Experiments and Structural Models / David McKenzie
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- McKenzie, David
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Banks & Banking Reform.
- E-Business.
- Finance and Private Sector Development.
- Firm Productivity.
- ICT Policy and Strategies.
- Impact Evaluation.
- Microfinance.
- Private Sector Development.
- Randomized Experiments.
- Small Scale Enterprise.
- Structural Models.
- Local Subjects:
- Banks & Banking Reform.
- E-Business.
- Finance and Private Sector Development.
- Firm Productivity.
- ICT Policy and Strategies.
- Impact Evaluation.
- Microfinance.
- Private Sector Development.
- Randomized Experiments.
- Small Scale Enterprise.
- Structural Models.
- Physical Description:
- 1 online resource (26 pages)
- Other Title:
- How Can We Learn Whether Firm Policies are Working in Africa?
- Place of Publication:
- Washington, D.C., The World Bank, 2011
- System Details:
- data file
- Summary:
- 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.
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