Ideas to Action:

Independent research for global prosperity

Publications

 

Cover of Working Paper 466
October 15, 2017

Can Africa Be a Manufacturing Destination? Labor Costs in Comparative Perspective - Working Paper 466

Our central question is whether African countries can break into global manufacturing in a substantial way. Our results suggest that for any given level of GDP, labor is more costly for firms that are located in Sub-Saharan Africa. However, we also find that there are a few countries in Africa that, on a labor cost basis, may be potential candidates for manufacturing—Ethiopia in particular stands out.

April 25, 2017

A Note on the Informal Sector

This work analyzes fresh data made available by updated, more comprehensive Enterprise Surveys of formal firms of various sizes and, importantly, of informal firms. It concentrates on five countries (the DRC, Ghana, Kenya, Myanmar, and Rwanda) to provide more fine-grained insights into differences in characteristics and productivity levels between formal and informal firms or different sizes in different developing countries.

Shopping Mall Escalators
August 19, 2016

Should Countries Be More Like Shopping Malls? A Proposal for Service Performance Guarantees

Many developing countries have made progress in political openness and economic management but still struggle to attract private sector investments. Potential investors to these countries have many concerns that can broadly be classified into high costs and high actual or perceived risks. Drawing on insights from existing guarantees offered by bilateral development agencies, national governments, utility companies, and even shopping malls, we suggest that Service Performance Guarantees can be part of the solution, offering investing firms the opportunity to purchase insurance against a wider range of risks than is currently possible and establishing a partnership of donors and recipient governments, accountable to their investor clients.

Alan Gelb , Vijaya Ramachandran , Matt Juden and Alice Rossignol
January 21, 2015

Time for FAO to Shift to a Higher Gear

Originally published in October 2013 and updated January 2015

Food security has arisen again on the development agenda. High and volatile food prices took a toll in 2007–08, and in many low-income countries agricultural yields have risen little, if at all, in the last decade. Moreover, food production in these poor countries is especially vulnerable to climate change. Meeting this demand is a global challenge. The Food and Agriculture Organization of the United Nations (FAO) is expected to lead the way in meeting this challenge and, with the arrival in 2012 of the first new director-general in 18 years, it has an opening to restructure itself to do so.

Should Countries Be More Like Shopping Malls? A Proposal for Service Performance Guarantees for Africa
September 17, 2014

Should Countries Be More Like Shopping Malls? A Proposal for Service Performance Guarantees for Africa

Many developing countries have made progress in political openness and economic management but lag in terms of attracting private sector investments, at least outside of narrow resource-based enclaves.These countries may have recognized potential but have not yet established the reputation needed to sustain investment through the inevitable political and policy shocks that take place in most countries. The concerns that deter investors are many but can be broadly classified into high costs that that prevent global competitiveness and high actual or perceived risks.

Alan Gelb , Vijaya Ramachandran and Alice Rossignol
July 20, 2009

To Formalize or Not to Formalize? Comparisons of Microenterprise Data from Southern and East Africa - Working Paper 175

Why do so many businesses choose to remain informal? Vijaya Ramachandran and co-authors discover that the answer is more nuanced than often believed. In East Africa, for instance, the difference in productivity between formal and informal firms is often indistinguishable, while in Southern Africa productivity it is more differentiated. Policies to encourage formalization and increase productivity are likely to be more successful in East Africa, whereas an emphasis on job training and vocational skills might be more appropriate in Southern Africa.

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Alan Gelb , Taye Mengistae , Vijaya Ramachandran and Manju Kedia Shah
Cover of Africa's Private Sector: What's Wrong with the Business Environment and What to Do About It
March 23, 2009

Africa's Private Sector: What's Wrong with the Business Environment and What to Do About It

What's keeping private business from flourishing in Africa? On the basis of unique enterprise surveys, Vijaya Ramachandran and her co-authors identify poor roads and unreliable power as major physical challenges; ethnic segmentation and the economic predominance ethnic minorities further constrain the business environment. The author show how investing in infrastructure and improving access to education can help bring about a broad-based business class in Africa.

Vijaya Ramachandran , Alan Gelb and Manju Kedia Shah
February 18, 2005

Business Environment and Comparative Advantage in Africa: Evidence from the Investment Climate Data - Working Paper 56

This paper ties together the macroeconomic and microeconomic evidence on the competitiveness of African manufacturing sectors. The conceptual framework is based on the newer theories that see the evolution of comparative advantage as influenced by the business climate—a key public good—and by external economies between clusters of firms entering in related sectors. Macroeconomic data from purchasing power parity (PPP), though imprecisely measured, estimates confirms that Africa is high-cost relative to its levels of income and productivity. This finding is compared with firm-level evidence from surveys undertaken for Investment Climate Assessments in 2000-2004.