Private Enterprise Development in Low Income Countries (PEDL) is a joint research initiative of the Centre for Economic Policy Research (CEPR) and the Foreign, Commonwealth & Development Office (FCDO). Over the period 2011-25 it will pursue a research agenda focusing on private-sector development in low-income countries (LICs). The Initiative is motivated by the need to better understand what determines the strength of market forces driving efficiency in these countries. Existing research suggests that the private sector in these countries faces a multitude of constraints that act upon each other. For example, the strategic interaction of firms with market power will be affected by the regulatory regime governing both new entrants and incumbent firms. What is needed is research that allows us to understand how these constraints interact.
- Innovation, Organisations, and Markets (IOM) - Research under this theme explores the structures and incentives that guide interactions in the private sector, and how these determine the productivity, efficiency, and distribution of economic activity in developing countries. Innovation covers topics related to measuring and understanding the drivers of improvements in firm performance. Under Organisations, the focus is on how individuals interact and are incentivised within firms. The Markets area studies interactions that cross firm boundaries and are instead governed by market-based incentives and institutions.
- Climate and Environment - The design of incentives and regulations to limit pollution, GHG emissions and environmental degradation in low-income contexts – and ameliorating the extent to which pre-existing market failures and government capacity constraints may undermine their efficacy – must be informed by research focused on private enterprise, with careful attention to the design and implementation of second-best environmental policies. The private sector will also be key in determining how environmental shocks are translated into economic damages; mediating adaptation to environmental risks; and facilitating access to insurance.
- Finance and Entrepreneurship - A key question in development remains what constrains firm growth, and what institutions and policies help to overcome those constraints. This requires more research on the subset of microenterprises with growth potential and the broader set of dynamic and high growth firms. Moreover, given the potential for multiplier and equilibrium effects through prices and competition, more work is needed to link the firm-level evidence to economy-wide impacts. This research theme focuses on high-growth entrepreneurship, with an increased focus on venture capital and private equity, particularly in Africa.
In addition to these three themes, PEDL supports research related to the work of British International Investment (BII), the UK’s development finance institution. BII and the Foreign, Commonwealth and Development Office (FCDO) are sponsoring this new research initiative aimed at understanding the impact of development finance on private sector development. Issues of interest include the effect of investment on private sector growth; the characteristics of high-growth firms and how they impact on their sectors and localities; supporting quality jobs, gender and climate finance; and production and distribution of broader inclusive products and services.
PEDL will give particular encouragement to proposals which address three cross-cutting issues:
Over the course of its lifetime, PEDL will undertake a range of other activities aimed at building a research community in private enterprise development in low-income countries, such as research workshops, training workshops, open events, a working paper series and a dedicated policy website.
To read more about PEDL, please read the Research Strategy.
PEDL supports the UN Global Compact and its principles. To find out more, please visit the UN Global Compact webpage. The UN Global Compact principles are part of PEDL's Code of Conduct for Researchers.
