Small Enterprise Responses to Liberalization in Five African Countries
This study investigates three issues concerning the role of indigenous entrepreneurs in the transition from a state-led development strategy to a more market-oriented approach with the private sector taking the lead: 1) the effects of liberalizing...
| Main Authors: | , , |
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| Format: | Brief |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/1995/06/1615073/small-enterprises-responses-liberalization-five-african-countries http://hdl.handle.net/10986/9993 |
| Summary: | This study investigates three issues
concerning the role of indigenous entrepreneurs in the
transition from a state-led development strategy to a more
market-oriented approach with the private sector taking the
lead: 1) the effects of liberalizing the policy regime on
the conditions for micro and small-scale enterprises (MSEs);
2) the responsiveness of MSEs to changes in incentives and
market conditions; and 3) the capacity of MSEs to mobilize
savings, absorb employment, and contribute to growth. The
study consolidates the results of surveys undertaken to
assess the effects of structural adjustment programs (SAPs)
on MSEs in five African countries. The positive effects of
SAP reforms on the environment for MSEs included greater
access to imported inputs, a shift in relative prices in
favor of domestic inputs, and less restrictive regulation of
private business. On the negative side, many MSEs faced
increasingly intense competition from imports and from a
growing supply of self-employed workers. Small-scale
enterprises (SSEs) with 6 to 49 workers were generally
better able to respond to changing conditions than
microenterprises with 1 to 5 workers. They were more likely
to change product lines, buy new equipment, and seek export
markets. SSE owners were also more likely to have entered
businees in response to a market opportunity, whereas
microentrepreneurs were more likely to have been motivated
by "push" factors such as family tradition and
lack of other opportunities. |
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