Private Enterprise Development in Low Income Countries (PEDL) is a new, joint research initiative directed and co-ordinated by the Centre for Economic Policy Research (CEPR) in partnership with the UK Department for International Development (DFID).
The 5-year research programme (2011 – 2016) will support an agenda focusing on private-sector development in low-income countries (LICs).
The Programme has been motivated by the need to develop a better understanding of what determines the strength of market forces driving efficiency in low-income countries (LICs) – 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.
The Programme will pursue a range of approaches that promise to produce credible research results that will be useful for policy-making, supporting research related to private enterprises of all sizes. It will be initially focused on four themes:
- Modelling market frictions in LICs using newly available data - we aim to achieve a better understanding of the impact of constraints to enterprise development in LICs. PEDL will encourage researchers to extend a “structural” approach to markets in LICs in order to measure the effect of frictions in these markets.
- Understanding how constraints interact using micro-founded macro models - constraints on enterprise growth are most often analysed one at a time, but firms often face constraints which come in bundles. We need an approach that allows us to understand how constraints interact, and how constraints on one industry have knock-on effects on other industries.
- The dynamics of SMEs: Informality and entrepreneurship - research con firms in LICs is challenging because firm-level data sets undercount the informal firms, microenterprises that operate outside the regulatory structure of the state and account for a third to a half of all economic activity. We will particularly encourage projects which identify innovative and cost-effective ways to gather new data to fill in gaps in the existing data sets.
- The role of export-oriented industries in driving growth - in many LICs the dynamic, growing sectors are export-oriented and the evidence suggests that exporters and MNCs (multinational corporations) play a role which is disproportionate to their share in output. We will encourage research in this area, since it has great potential.
Research Grants
PEDL offers a competitive research grants programme: a mixture of major research grants and smaller, exploratory grants. Grants will be awarded on a competitive basis, with applications solicited from researchers and institutions throughout the world.
On addition to the themes outlined above, the Grants Programme will give particular encouragement to proposals that address issues related to:
- fragile and conflict affected states;
- gender;
- climate, environment and social compliance.
Other Planned Activities
In 2012 PEDL will undertake a range of other activities aimed at building a research community in private enterprise development in low-income countries:
- research workshops;
- a working paper series reporting on the research carried out under the auspices of the Programme;
- training workshops;
- open events, at which the results of PEDL research will be presented and discussed with policymakers and practitioners;
- a dedicated policy website
The goal of the Programme is to influence policy in LICs. Researchers will be responsible for developing a Policy Impact Plan, which must be included as part of the research proposal. The quality and feasibility of the Plan will be one of the criteria used to evaluate the proposal.
For more information about this research initiative, please read a more detailed summary of the proposed research programme.
