PEDL Policy Insights Series

PEDL Policy Insights No. 1 | Management and Productivity in the Private Sector

What explains differences in productivity across firms and countries? For the past decade, a project called the World Management Survey (WMS) has been collecting management data to understand the role of management practices as an important factor in explaining variation in firm productivity.

Bloom et al. (2016) find three key results, which are briefly summarized and discussed in this article. First, there are large and persistent variations in management practices across firms and countries. Second, these variations in management practices account for much of the variation in productivity, growth, innovation and exporting we see across firms and countries. Finally, the authors find five key factors that are associated with better management practices, which are shown in the box on the right. Hence, policies to open markets, relax ownership controls, increase trade and FDI, deregulate markets and raise workforce skills will help to improve management practices, and thus productivity and growth.

PEDL Policy Insights No.2 | Entry Regulation and the Formalization of Microenterprises in Developing Countries

Is there a policy rationale for actively trying to encourage small firms to formalise? In the last two decades, hundreds of regulatory reforms have been implemented in countries across the world with the primary objective of making it easier to formally register a business. This report summarises the evidence on the effect of these policy reforms, as discussed by Bruhn and McKenzie (2014).

PEDL Policy Insights No.3 | Chinese Investment in Africa: How Much Do We Know?

Many reports have described Chinese engagement in Africa as “neo-imperialism” and “authoritarian capitalism”, exploiting resources and local labour while undermining democracy. On the other hand, Chinese demand for natural resources has sometimes been credited with boosting growth and resource prices across the African continent. These claims are put to the test, using the best available data, by Brautigam, Diao, McMillan and Silver (2017). Their three key results are briefly summarised in this article.

PEDL Policy Insights No.4 | Getting capital to Microenterprises: What do we know about why and how?

Recent research illuminates the opportunity to increase incomes of microenterprise owners through the provision of capital. Experiments providing capital grants to randomly selected subsets of enterprises show that the average increase in earnings following receipt of a grant is much higher than the interest rates charged by micro lenders. But there is important heterogeneity in the returns.
Moreover, results from experiments on loans made through traditional microcredit contracts are disappointing. Research implementing tweaks to microcredit contracts and eliciting information from entrepreneurial communities on potential returns from investments shows some promise in overcoming these issues. Ongoing work on microequity contracts also offers hope for contracts that provide some risk-sharing, allowing entrepreneurs to make riskier investments.