Business Environment Archive

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Does Business Training Work? | News, views, methods, and insights from the world of impact evaluation

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 interesting (and some not-so-obvious) lessons for actually doing impact evaluation of business training programs – I’ll save these lessons for next week and today talk about why we don’t know that much.

To take stock of the available evidence on business training, David and Chris search Econlit, Google scholar and then go out and ask folks for studies. They limit their discussion to papers which have tried to deal with selection on observables and unobservables and focuses on business practices (thus not taking on the substantial technical/vocational training literature). This gives them 14 studies to focus on (13 of which are randomized). These are almost all some sort of classroom training (sometimes combined as part of a microfinance program) but they also briefly discuss three other experiments which focus on providing individual consulting services.

Chris and David point out that for the average business a 25% increase in profit might cover 75% of the cost of the program over a year. But none of the studies was powered for a 25% increase in revenues and only two were powered for a 25% increase in profits (at 80% power). So we shouldn’t be surprised by the relatively weak overall results on these programs. And keep in mind that this is a fairly new area – of their 14 studies, only 5 have been published so far, and the oldest one dates from 2010 – so we are still learning about doing evaluations in this area.

Does Business Training Work? | News, views, methods, and insights from the world of impact evaluation.

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Development Gateway Highlight: Business for the Environment

The human race is pushing our planet towards the edge of disaster by flooding land, sea, and air with pollution and by over use of our natural resources. These issues amount to one of the greatest challenges humanity has ever faced. As the world explores alternative growth paths, new ways of doing business are critical. Innovative solutions are pointing the way to new business models and market opportunities.”

B4E, the Global Business Summit for the Environment, is the leading international conference focusing on business and the environment. B4E 2008, held in Singapore on April 22, highlighted the most urgent environmental challenges facing the world today and discussed business-driven solutions for mitigating and adapting to climate change. Important topics addressed include resource efficiencies, renewable energies, new business models and climate strategies. Delegates shared best practices for identifying and managing the risks posed by climate change and uncover opportunities for developing competitive advantages.

During the Summit, CEOs and senior executives from leading global companies joined leaders from government, international agencies, NGOs, and other organizations to discuss the issues, forge partnerships and explore solutions for a greener future. http://tinyurl.com/67nmfv

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Economic Partnership Agreements Negotiations: Where do we stand?

At a time when the pace of the EPA negotiations has increased in all regions, and the state of play is ever changing, accessing the latest information available on these wide-ranging agreements is of essence. Pursuing its efforts to increase the transparency of the highly sensitive EPA negotiations, ECDPM has decided to set up dedicated pages for each ACP region negotiating an EPA with the EU at www.acp-eu-trade.org/epa and www.ecdpm.org/epa. These pages will be updated on a weekly basis and aim at providing news “as-it-happens”, drawing from various reliable sources of information. French versions of these webpages are available for the regions Central Africa, West Africa and Eastern and Southern Africa (ESA) as well as for the All ACP level.

Oxfam International on EPAs in 2008

According to the NGO, these agreements demand ACP countries to liberalise their EU imports as broadly and as rapidly as possible and rule out previous declarations (in most cases, liberalisation will cover more than 80% of imports more often than not over 15 years); do not offer adequate protection for developing industries or food safety because they do not contain adequate safeguard clauses; do not contain a clause for the modification of the tariff commitments; demand the reduction or elimination of export restrictions (reducing the possibilities for reserving raw materials for local processing); do not contain EU commitment to reduce or eliminate export subsidies; only contain minor improvement of rules origin, limiting cumulation to countries that have signed interim agreements; oblige ACP countries to negotiate services, investment, government procurement and other issues even though Cotonou Agreement does not contain such obligations and they remain vague on development cooperation and impact assessment. See http://www.oxfam.org.uk/applications/blogs/pressoffice/2008/01/oxfam_international_on_economi.html

ONGOING DISCUSSION FORUM:
Which factors are necessary to the achievement of a positive relationship between
Trade and Sustainable Development?

“Trade liberalization and sustainable development are not unavoidably incompatible. Trade liberalization can advance sustainable development goals, just as it can retard their achievement. The same can be said for foreign direct investment. Appropriate investment can spur sustainable development, but much investment in developing countries has been environmentally, socially and often economically questionable.” (IISD Statement on Trade and SD) We kindly invite you to participate in the recently posted Discussion Forum. You will need to be logged-in to the Development Gateway to contribute. We advise to register there anyway.
http://topics.developmentgateway.org/trade/discussion/default/showDiscussion.do~id=5306?intcmp=925

GTZ Studies on EPAs
Four Studies on how to ensure development friendly EPAs have been published by GTZ. The main themes are TRIPS, trade in services, SPS measures, and trade liberalisation impacting on regional integration. http://www.gtz.de/en/themen/laendliche-entwicklung/13421.htm

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World Economic Situation and Prospects 2008 (WESP 2008)

According to WESP 2008, the world economy is facing serious challenges in sustaining the strong pace of economic growth seen over the past few years. While the baseline forecast is for world economic growth to moderate somewhat in 2008, the risks associated with the bursting of the housing bubble in the United States, the related unfolding credit crisis, the decline of the dollar, large global imbalances and high oil prices are all pointing to the downside. The report draws some lessons from the global financial turmoil of 2007, which was triggered by the meltdown of sub-prime mortgages in the United States, and points out that the various measures adopted by central banks of the major economies did not address the root causes of the turmoil: the huge global imbalances. In an alternative scenario, which takes into account the possibility of a sharper-than-expected decline in house prices in the United States and a hard landing of the US dollar, the United States economy would fall into a recession, while global growth would be significantly lower than the baseline. In addition to trends in international trade and capital flows, WESP 2008 also covers the latest progress and policy issues related to international trade negotiations and reform of the international financial system. http://www.un.org/esa/policy/wess/wesp.html

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Poor families hit hardest by bribery, even in rich countries, finds new TI poll

Poor families are hit hardest by demands for bribes in developed as well as developing countries, according to Transparency international’s Global Corruption Barometer 2007. The public opinion survey, published today ahead of International Anti-Corruption Day on 9 December, also found that citizens in countries across the globe continue to see political parties and parliaments as the institutions most compromised by corruption. The Barometer, which surveys 63,199 respondents in 60 countries, offers a broad spectrum of data on common experiences of corruption, including which institutions most frequently demand bribes, where citizens see the greatest degree of corruption, and how they see both the future development of corruption and their governments’ efforts to eradicate it. http://www.transparency.org/news_room/latest_news/press_releases/2007/2007_12_06_gcb_2007_en

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New Microinsurance Initiative from the ILO and GatesFoundation

The International Labour Organization (ILO) and the Bill & Melinda Gates Foundation recently announced a new partnership to develop or improve insurance products to promote decent work for tens of millions of low-income people in the developing world. Over the course of the next three years, the facility will issue bi-annual requests for proposals and provide funding to pilot new insurance products, improve efficiency in the field, and use technology to create new products that better meet people’s needs. The facility will also train technical specialists to help replicate successful models. This facility builds on the successful efforts of the CGAP Working Group on Microinsurance to document the experiences of microinsurance operations around the world. Funded by DFID, GTZ, ILO and SIDA, this “Good and Bad Practices” project conducted a series of case studies of insurance companies, microfinance institutions and community-based schemes that provide insurance to the poor. See case studies on http://www.microinsurancefocus.org

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IFC SME: Entrepreneurship Database

IFC SME: Entrepreneurship Database

The 2007 World Bank Group Entrepreneurship Survey measures entrepreneurial activity in 84 developing and industrial countries over the period 2003-2005. The database includes cross-country, time-series data on the number of total and newly registered businesses, collected directly from Registrar of Companies around the world. In its second year, this survey incorporates improvements in methodology, and expanded participation from countries covered, allowing for greater cross-border compatibility of data compared with the 2006 survey. This joint effort by the IFC SME Department and the World Bank Developing Research Group is the most comprehensive dataset on cross-country firm entry data available today.
http://www.ifc.org/ifcext/sme.nsf/Content/Entrepreneurship+Database

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PSD blog is looking for experimental research in entrepreneurship

PSD blog is looking for experimental research in entrepreneurship

The 2007 World Bank Entrepreneuship Database finds significant relationships between entrepreneurial activity and the quality of the enabling environment. The bank and the Kauffman Foundation are now jointly offering funding of up to $35,000 for research projects that will study what contributes to greater entrepreneurship and formal sector participation. http://psdblog.worldbank.org/psdblog/2007/11/looking-for-exp.html

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Northern Belize Economic Diversification Study

Northern Belize Economic Diversification Study

We are currently in Belize to identify priority sectors offering economic diversification opportunities in the Districts of Corozal and Orange Walk as their economies adapt to change. We will recommend areas for required social and economic services/infrastructure and capacity building, and develop proposals for investments in the recommended areas. The overall objective is to provide alternative livelihoods opportunities and social and economic services and infrastructure in the districts of Corozal and Orange Walk as the sugar industry adapts to changes in the world market for sugar. Please see our Terms of Reference at http://www.weitzenegger.de/en/sugarbel.html.

If you would like to have a consultation meeting with us while in Belize or if you would like to be invited to a workshop in Corozal or Orange Walk scheduled for mid-February, than please let us know. Ms. Maria Soraia Roches (tel. 8222527) at the Ministry of National Development kindly helps us coordinates our schedule.

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World Bank calls for broader access to finance

Between 50 and 80 percent of adults in many developing countries have inadequate access to financial services, finds a new World Bank policy research report entitled “Finance for All? Policies and Pitfalls in Expanding Access”. According to the report, failure to provide more households and small and medium enterprises with the financial services they need acts as a brake on development. While noting the microfinance industry’s progress in delivering credit to poor people, the report calls for a broader financial strategy that delivers services to all excluded people and firms. Inclusive financial systems ultimately benefit the poorest people and the smallest firms the most, by creating more jobs, raising incomes, and generating more opportunities for small businesses. The report says that governments should strengthen institutions and adopt new technologies to bring down transaction costs. Research suggests that governments should also encourage competition—including foreign bank entry—and provide the right regulatory incentives. In contrast, direct interventions by governments, such as through credit subsidies or government-owned financial institutions, can be counter-productive, reducing incentives for the private sector to deliver services to the poor.
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTPRRS/EXTFINFORALL/0,,menuPK:4099731~pagePK:64168092~piPK:64168088~theSitePK:4099598,00.html