Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa

This paper uses comprehensive and comparable firm-level manufacturing censuses from four Sub-Saharan African (SSA) countries to examine the extent, costs, and nature of within-industry resource misallocation between heterogeneous production units. This paper finds evidence of severe misallocation in...

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Main Authors:	Cirera, Xavier, Fattal-Jaef, Roberto, Maemir, Hibret
Format:	Journal Article
Published:	Published by Oxford University Press on behalf of the World Bank 2021
Subjects:	DISTORTIONS MISALLOCATION TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY RESOURCE ALLOCATION MANUFACTURING CENSUS
Online Access:	http://hdl.handle.net/10986/36072

id	okr-10986-36072
recordtype	oai_dc
spelling	okr-10986-360722021-08-07T05:10:29Z Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa Cirera, Xavier Fattal-Jaef, Roberto Maemir, Hibret DISTORTIONS MISALLOCATION TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY RESOURCE ALLOCATION MANUFACTURING CENSUS This paper uses comprehensive and comparable firm-level manufacturing censuses from four Sub-Saharan African (SSA) countries to examine the extent, costs, and nature of within-industry resource misallocation between heterogeneous production units. This paper finds evidence of severe misallocation in which resources are diverted away from high-productivity firms towards low-productivity ones, although the magnitude differs across countries. Estimated aggregate productivity gains from the hypothetical equalization of marginal returns range from 30 percent in Côte d’Ivoire to 160 percent in Kenya. The magnitude of reallocation gains appears considerably lower when performing the same counterfactual exercise based on the World Bank Enterprise Surveys once the value-added shares of industries are adjusted using the census data. This suggests that linking firm-level survey data to aggregate outcomes requires census-type data or sampling methods that take the true structure of production into account. 2021-08-06T16:59:12Z 2021-08-06T16:59:12Z 2020-02 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/36072 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research Publications & Research :: Journal Article Africa Sub-Saharan Africa
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	DISTORTIONS MISALLOCATION TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY RESOURCE ALLOCATION MANUFACTURING CENSUS
spellingShingle	DISTORTIONS MISALLOCATION TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY RESOURCE ALLOCATION MANUFACTURING CENSUS Cirera, Xavier Fattal-Jaef, Roberto Maemir, Hibret Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa
geographic_facet	Africa Sub-Saharan Africa
description	This paper uses comprehensive and comparable firm-level manufacturing censuses from four Sub-Saharan African (SSA) countries to examine the extent, costs, and nature of within-industry resource misallocation between heterogeneous production units. This paper finds evidence of severe misallocation in which resources are diverted away from high-productivity firms towards low-productivity ones, although the magnitude differs across countries. Estimated aggregate productivity gains from the hypothetical equalization of marginal returns range from 30 percent in Côte d’Ivoire to 160 percent in Kenya. The magnitude of reallocation gains appears considerably lower when performing the same counterfactual exercise based on the World Bank Enterprise Surveys once the value-added shares of industries are adjusted using the census data. This suggests that linking firm-level survey data to aggregate outcomes requires census-type data or sampling methods that take the true structure of production into account.
format	Journal Article
author	Cirera, Xavier Fattal-Jaef, Roberto Maemir, Hibret
author_facet	Cirera, Xavier Fattal-Jaef, Roberto Maemir, Hibret
author_sort	Cirera, Xavier
title	Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa
title_short	Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa
title_full	Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa
title_fullStr	Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa
title_full_unstemmed	Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa
title_sort	taxing the good? distortions, misallocation, and productivity in sub-saharan africa
publisher	Published by Oxford University Press on behalf of the World Bank
publishDate	2021
url	http://hdl.handle.net/10986/36072
_version_	1764484369039228928

Taxing the Good? Distortions, Misallocation, and Productivity in Sub-Saharan Africa

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