Development as diffusion: manufacturing productivity and Sub-Saharan Africa’s missing middle / CGDEV.org White paper
Article by Geld, Meyer, Ramachandran –
“.. .we address the political economy of the complex and often difficult relations between government and business in small concentrated SSA economies. In this context, we consider the incentives to reform the business climate. On the side of government, one strand of analysis argues that the distinctive historical process of SSA state formation has not created strong incentives for states to develop the social contracts needed to underpin effective states or to acquire the capabilities needed for effective management of the economy. As a compounding factor, the small size of most SSA economies has led to high concentrations of market power and to powerful groups, often with close relationships to governments and an interest in preserving the status quo. This has resulted in high de facto barriers to entry and expansion and has thus slowed efforts to reform. A third influence on convergence is ‘agency’, the characteristics of few leading firms, and the processes through which they have acquired their knowledge of market opportunities and production.”
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