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Unlocking Productive Entrepreneurship In Africa’S Least Developed Countries

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  • Zuzana Brixiova

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Abstract

In Africa’s least developed countries (LDCs), escape from poverty and convergence to living standards of more advanced economies depends critically on structural transformation and the emergence of productive entrepreneurship that would accelerate growth and job creation. So far, however, subsistence agriculture has been the main source of employment in these countries, while a dynamic private sector in industry or high value-added services has remained elusive. Utilizing the flow approach to labor markets, this paper complements the empirical literature and numerous surveys on small and medium enterprise (SME) constraints and develops a theoretical framework that examines the main obstacles to entrepreneurship in Africa’s LDCs. The paper posits that given the persistent frictions in product and labor markets as well as skill shortages that characterize these economies, development of productive entrepreneurship cannot be left to markets alone. The policy analysis suggests that the state has an important role to play. Well-targeted government interventions including training of potential entrepreneurs and workers can help establish more modern and highly productive SME clusters that Africa’s LDCs need.

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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp990.

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Length: pages
Date of creation: 01 Jun 2010
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Handle: RePEc:wdi:papers:2010-990

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Keywords: Entrepreneurship; institutions and policies; Africa; LDCs; search model;

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  1. Baliamoune-Lutz, Mina, 2009. "Entrepreneurship and Reforms in Developing Countries," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. Mina Baliamoune-Lutz, 2007. "Entrepreneurship, Reforms, and Development: Empirical Evidence," ICER Working Papers, ICER - International Centre for Economic Research 38-2007, ICER - International Centre for Economic Research.
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Cited by:
  1. Zuzana Brixiova, 2013. "Modeling productive entrepreneurship in developing countries," Small Business Economics, Springer, Springer, vol. 41(1), pages 183-194, June.
  2. Léonce Ndikumana & Mina Baliamoune-Lutz & Zuzana Brixiová, 2011. "Credit Constraints And Productive Entrepreneurship In Africa," Working Papers, Political Economy Research Institute, University of Massachusetts at Amherst wp276, Political Economy Research Institute, University of Massachusetts at Amherst.
  3. Mina Baliamoune-Lutz & Zuzana Brixiová & Léonce Ndikumana, 2011. "Credit Constraints & Productive Entrepreneurship in Africa," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan wp1025, William Davidson Institute at the University of Michigan.

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