Growth-promoting structural change explains much of Africa's recent growth boom, especially in Ethiopia, Malawi, Senegal and Tanzania. In these countries, however, structural change has not been accompanied by labor productivity growth in the nonagricultural sectors. In fact, the expansion of services and manufacturing has typically been accompanied by low or negative productivity growth in these same sectors.

Cash transfer programs continue to be implemented and expanded by governments and non-government organizations in many low-income countries as a tool for poverty alleviation. When implemented at scale, such programs may have important short- and long-run implications for firms. However, there are relatively few opportunities to study how an economy responds to an exogenous shock of such a magnitude, and the response of the private sector is critical in determining how these types of shocks will propagate through the economy.

The Government of Ethiopia has embarked on an ambitious industrialization strategy based on the creation of special economic zones as centers of export-oriented light manufacturing. The flagship industrial park of this strategy is located in the city of Hawassa, in southern Ethiopia. The Hawassa Industrial Park (HIP) is one of ten industrial parks that are currently being planned and built all over Ethiopia.

This project aims to rigorously identify what type of market arrangements and infrastructure provide the most sustainable environment for agricultural rental markets of equipment to arise, or how the entry of formal rental opportunities impact informal renting arrangements.