Private Sector Development
Many important policies are implemented at the national level. Monetary policy, fiscal policy, and many regulations are key examples. Pure time series or before-after analysis of the impacts of changes in these policies on the economy of a country will be contaminated by other changes going on in the economy. Simply trying to difference out global trends will not account for systematic differences in the growth path of the country where the reform took place from the average global growth path. This makes evaluation of the impacts of such policies difficult.
This is the sixth of our series of posts by PhD students on the job market.
What do we really know about how to build business capacity? A nice new paper by David McKenzie and Chris Woodruff takes a look at the evidence on business training programs – one of the more common tools used to build up small and medium enterprises. They do some work to make the papers somewhat comparable and this helps us to add up the totality of the lessons. What’s more, as David and Chris go through the evidence, they come up with a lot of interestin
We want to increase (girls) education… but what’s the best way to do this?
That’s one blunt message from my new working paper with Marcel Fafchamps, Simon Quinn and Chris Woodruff, which replicates in Ghana a study that Chris and I had previously done in Sri Lanka with Suresh de Mel. In the new experiment, we take almost 800 microenterprises in urban Ghana, and randomly divide them into treatment and control groups.
Millions of dollars are spent each year trying to improve the productivity of firms in Africa (and those in other developing countries), yet we have very little rigorous evidence as to what works. In a new working paper I look at whether it is even possible to learn whether such policies even work, and what can be done to make progress.
Small number of firms + Large heterogeneity = Not much power
In some joint work with an African government, my colleagues Francisco Campos, Jessica Leino and I were trying to evaluate the impacts of one of their support programs for small businesses. This service was open to anyone who contacted them, but the number of entrepreneurs who knew about the program (and hence who used it) was low. Basically, the way the program worked was that when the entrepreneur came into the office and registered for the program, the implementing agency would assess the needs of the business and then provide the entrepreneur with subsidized access to
The March 2011 issue of the Harvard Business Review has “a step-by-step guide to smart business experiments” by Eric Anderson and Duncan Simester, two marketing professors who have done a number of experiments with large firms in the U.S. Their bottom line message for businesses is: