Finance, Competitiveness, and Innovation in Focus
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The series captures the experience, innovative approaches and solutions for development of the World Bank Group covering financial sector topics of relevance to both the public and private sectors. The series is comprised of short knowledge notes, policy notes, case studies, lessons learned or a combination therein. This series was formerly known as Finance in Focus.
Items in this collection
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Publication
Institutions for Investment: Establishing a High-Performing Institutional Framework for Foreign Direct Investment
(Washington, DC: World Bank, 2019-12-31)A well-functioning institutional framework can result in higher levels of foreign direct investment. It requires several factors such as a shared strategic vision, solid institutions capable of delivering on their specific mandates and collaborating beyond their walls, and a strong political and financial support for all. The note describes key government functions for investment, suggests a process and principles for creating optimal institutional structures to deliver them, and provides examples. In particular, it examines the role of investment promotion agencies (IPAs) the agency usually tasked with operationalizing government FDI goals as well as the dilemmas that governments face in the context of institutional specialization versus function consolidation. -
Publication
How Countries Can Fully Implement the New York Convention: A Critical Tool for Enforcement of International Arbitration Decisions
(World Bank, Washington, DC, 2019-12-30)The year 2018 marked the 60th anniversary of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the most important international convention in the area of international commercial arbitration. The Convention is also said to be the most successful international treaty in the area of private international law. This note primarily targets policy makers and their legal advisors in countries looking at ways to improve their business environment, to become more attractive locations for trade and investment, through better dispute resolution options for international transactions. First, the note explains that international commercial arbitration, as part of countries' legally recognized dispute resolution options, is critical to cross-border contract enforcement. As countries strengthen their international arbitration regimes, they improve their competitiveness in international markets and increase investment and trade by reducing transaction risks and the cost of new infrastructure projects. Countries can improve their international commercial arbitration systems by passing modern legislation consistent with international best practice, ratifying international arbitration conventions, strengthening judicial capacity to enforce arbitral awards, and investing in local arbitration centers. -
Publication
Financial Safety Nets and Bank Resolution Frameworks in Southern Africa: Summary of Key Issues and Challenges
(World Bank, Washington, DC, 2019-04)This report provides an assessment of the current state of development of financial safety nets and bank resolution frameworks in eight countries in southern Africa (Botswana, Eswatini [formerly Swaziland], Lesotho, Mozambique, Namibia, South Africa, Zambia, and Zimbabwe). It has been prepared to inform ongoing and planned technical assistance projects in the southern Africa region and to provide a basis for engagement with the authorities in each of the countries covered by the study. This summary draws from more detailed material contained in a comprehensive study. -
Publication
Tanzania and Implementation of East Africa Mutual Recognition of Veterinary Medicines
(World Bank, Washington, DC, 2019-03)Tanzania has the third largest livestock population in Africa (after Ethiopia and Sudan), but the competitiveness of Tanzania’s livestock sector faces many challenges, including lack of access to good-quality, effective, safe veterinary drugs and vaccines, especially for smallholders. Availability of good-quality, affordable, effective inputs (including veterinary drugs, vaccines, and compound animal feed) in the market is critical to increasing productivity and ensuring the safety of the animals. Taking these challenges into consideration, in 2017, the government asked the Tanzania Food and Drugs Authority (TFDA) and the Ministry of Livestock and Fisheries to establish measures and mechanisms to increase the availability of drugs and vaccines in the country. The TFDA has entered into a memorandum of understanding with the Tanzania Veterinary Council to minimize overlap of functions between them and to increase the availability of quality regulatory services. Effective implementation of the mutual recognition procedures (MRP) will enhance faster registration and availability of good-quality, safe, effective immunological veterinary products (IVPs) and may lower IVP costs. -
Publication
Albania: Trade Impact of CEFTA
(World Bank, Washington, DC, 2018-12)Regional free trade agreements (FTAs) have a sizable effect on exports and foster economic growth. While reducing tariffs in member countries, regional FTAs harmonize trade policy across regions and reduce regulation uncertainty for exporters. They are particularly important for supporting trade in isolated countries such as Albania, a transition economy in the Western Balkans. This policy note looks at the impact of membership in the Central European Free Trade Agreement (CEFTA) on Albania's export growth. It finds that Albanian exports to CEFTA members have grown much faster than its exports to other countries. A large share of this growth is contributed by firms that did not export to CEFTA countries previously and via new exports that were among the least traded to CEFTA countries. We also measure the impact of CEFTA on Albanian exports using a gravity equation, which finds that CEFTA increased Albanian exports to member countries between 34 percent and 144 percent. -
Publication
Competitive Fruit and Vegetable Products in Albania
(World Bank, Washington, DC, 2018-12)Albania is heavily dependent on its agricultural sector, which accounts for 20.3 percent of GDP, 49 percent of employment and 8.5 percent of total exports. The fruit and vegetable sector represents 20 percent of Albanian agriculture but contributes 36 percent of its exports and this share is expected to increase. The note posits an idea that as the domestic market for many of these products is saturated, Albanian fruits and vegetables have been gaining ground in the Western Balkans and are well positioned to make headway in the EU-28 market as well. However, Albanian producers face many constraints in meeting the rigid and complex demands of the EU market, constraints that an export strategy focused solely on identifying products for export is unlikely to change. The policy paradigm has shifted to approaches that focus on integrating local industries into global value chains that help facilitate technology transfer and create jobs. -
Publication
Which Countries are Better Prepared to Compete Globally in the Disruptive Technology Age?: A Rapid, Forward-Looking Analysis of Countries' Share of the Global Private Sector
(World Bank, Washington, DC, 2018-10-23)This note provides a rapid, forward-looking analysis of countries’ share of the global private sector. By using technology-enabled Unicorns as a leading indicator of the future’s global private sector, which is dominated by a technology platform business model of zero marginal costs and winner-takes-all dynamics, this analysis provides an indication of relative gains and losses of countries in the transition to a technology-driven new economy. The results are tested by comparing the gross domestic product (GDP) growth of countries and their relative position in this transition, which is then measured using a forward-looking approach. This analysis is a first approximation toward a predictive assessment and requires further research. However, the results provided in this note can help policy makers consider and assess new factors to deal with the uncertainties of disruptive technologies in their economies. -
Publication
Supporting Entrepreneurs at the Local Level: The Effect of Accelerators and Mentors on Early-Stage Firms
(World Bank, Washington, DC, 2018-09-06)We investigate the association between entrepreneurship support programs and the likelihood of receiving funding for early-stage firms. We use a novel database of 2,887 early-stage technology companies from nine local ecosystems in eight countries that includes data about the founders’ demographic characteristics, educational background, work experience, and entrepreneurial history; we also use data about the start-ups’ history and evolution that follow their progress through support programs and early-stage funding. We isolate two support interventions—acceleration and mentorship—that the literature has found to have a larger effect on a firm’s performance, and we test if such effect is supported from an ecosystem perspective. After accounting for variations in founder characteristics and business environment, we find a positive association between acceleration and mentorship by experienced founders and the likelihood of receiving funding, whereas other support programs, such as incubation, are negatively correlated with funding. We also find that some founders’ characteristics, such as increased education and experience, have a positive correlation with funding. -
Publication
Expanding Access to Finance for Small-Scale Businesses: Secured Transactions Reform--An Indonesia Case Study
(World Bank, Washington, DC, 2017-01-05)A lack of access to finance has been one of the biggest impediments to the development and growth of the small-scale business sector in Indonesia. While micro, small and medium-sized enterprises (MSMEs) account for almost all employment in Indonesia (97 percent), the sector as a whole accounts for just about 57 percent of Gross National Product. Surveys suggest that one of the main constraints on the growth of the sector is a lack of access to finance, with almost half of Indonesian MSMEs citing access to finance as the top constraint to business growth. In 2012 the World Bank Group (WBG), in partnership with Switzerland and Japan, engaged with the Government of Indonesia to improve access to finance for the small-scale sector by enabling the use of movable collateral for formal lending. The use of movable collateral, such as vehicles, machinery, equipment, inventory or livestock, make it possible for enterprises and individuals who lack fixed collateral, such as land and property, to access finance. It also supports the growth of the financial sector, as it promotes portfolio diversification. This case study shows how the World Bank Group’s specialist team in Indonesia engaged with the government to promote an enabling environment and develop a sound secured transactions infrastructure to increase access to finance for the MSME sector. -
Publication
Fixed Income Instruments to Mobilize Institutional Investors for SME Financing in EMEs
(World Bank, Washington, DC, 2017)Emerging market economies (EMEs) face significant funding gaps in strategic sectors, such as infrastructure and small and medium enterprise (SME) financing, that if not addressed can stifle growth. In this context, in 2015 the finance and markets (F and M) global practice led the production of a joint World Bank Group (WBG) and International Monetary Fund (IMF) and Organization for Economic Co-operation and Development (OECD) report for the G20 on capital markets instruments to mobilize institutional investors to infrastructure and SME financing in emerging market economies. The report focuses on fixed income instruments that can help mobilize domestic institutional investors, in particular pension funds and insurance companies, to infrastructure and SME financing in EMEs and provide policy recommendations to facilitate their use.