Private Sector Development, Privatization, and Industrial Policy
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Publication
Paths of Productivity Growth in Poland: A Firm-Level Perspective
(World Bank, Washington, DC, 2021-10-31)After a long period of economic transformation that included introducing a series of market-oriented reforms and joining the European Union (EU), Poland was one of the fastest-growing economies in the world by 2020. This report investigates differences in productivity dynamics across economic segments and attempts to derive policy recommendations to improve the Polish economy’s productivity performance. First, the authors estimate firm-level total factor productivity (TFP), compute labor productivity indices, and analyze the main productivity patterns between 2009 and 2019. Second, the authors decompose aggregate productivity performance into the within, between, and net entry components using the Melitz Polanec decomposition method to understand the underlying response behind the observed productivity growth in Polish sectors and industries. The efficiency of resource allocation (measured by the between effect) worsened over time in manufacturing and was responsible for the sector’s productivity slowdown while allocative efficiency gains improved productivity performance in construction and services. To boost Polish productivity, the empirical evidence provided in the report indicates certain areas for policy actions as well as a few directions for necessary further investigation. -
Publication
Thailand Manufacturing Firm Productivity Report
(World Bank, Bangkok, 2020-06-17)Thailand is an enduring development success story. Between the late 1960s and mid-1990s, strong and sustained economic growth propelled the country from low-income to upper-middle-income status. To achieve high-income status by 2037, the authorities will need to draw on the experiences of other upper-middle-income countries that have successfully completed the transition, as well as those that continue to struggle. The Coronavirus (COVID-19) outbreak has severely impacted growth in Thailand, with the economy expected to contract in 2020 amid heightened uncertainty surrounding the path of the pandemic. This report focuses on the manufacturing sector builds on a framework that emphasizes the microeconomic and macroeconomic linkages of the sources of productivity growth. In line with this framework, Chapter 1 begins with an overview of Thailand’s productivity dynamics at the macroeconomic level and identifies the causes of its slowing GDP growth rate.7 Chapter 2 analyzes the characteristics of Thai manufacturing firms and sub-sector productivity dynamics, revealing the drivers of firm productivity and distinguishing the relative contributions of within-firm effects, between-firm effects, and market dynamism. Chapter 3 evaluates the impact of competition on firm productivity by comparing market entry and exit indicators with price markups. Chapter 4 concludes with a set of policy recommendations designed to boost firm productivity in Thailand’s manufacturing sector. -
Publication
Creating Markets in Burkina Faso: Growing Burkina Faso’s Private Sector and Harnessing it to Bolster Economic Resilience
(International Finance Corporation, Washington, DC, 2019-07-01)A small landlocked economy in the heart of West Africa’s French-speaking Sahel, Burkina Faso is characterized by its modest economic size, with a rapid population growth, with one of the highest per capita birth rates in the world. Burkina Faso needs to create 300,000 jobs annually to match its demographic growth, while about ninety percent of its workers are in the informal sector. Despite sustained robust economic growth over the past two decades driven by cotton and gold exports, private investment is low. Compounding the considerable development challenges that it faces, Burkina Faso is currently confronted by acute security and climatic threats, together with emerging fiscal risks. This country private sector diagnostic (CPSD) therefore investigates whether opportunities exist for the private sector to contribute more substantially to Burkina Faso’s development. The CPSD proposes a platform for action aimed at boosting Burkina Faso’s development through greater private sector investment. The remainder of the report provides an overview of: (i) the private sector environment; (ii) the cross-cutting constraints to the private sector; (iii) the critical enabling sector bottlenecks to the private sector; (iv) the opportunities for the private sector; and (v) a series of priority private sector focused recommendations. -
Publication
Creating Markets in Morocco: A Second Generation of Reforms - Boosting Private Sector Growth, Job Creation and Skills Upgrading
(International Finance Corporation, Washington, DC, 2019-06-01)Morocco has steered significant resources towards large investments in economic sectors identified as strategic to growth, and for increased productivity and value addition. Despite Morocco’s strikingly high investment rate, one of the highest in the world at an average of thirty-four percent of gross domestic product (GDP) annually since the mid-2000s, the returns in economic growth, job creation and productivity, have been disappointing. The Moroccan economy has performed particularly poorly in terms of job creation. A more vibrant private sector is needed to create more jobs. This CPSD identifies policy recommendations and investment opportunities that would foster job creation by the formal private sector and improve labor supply in skills that would anchor Morocco as an emerging economy, to continue its path of growth, and to move into higher value-added and innovative sectors. -
Publication
Creating Markets in Ethiopia: Sustaining Progress Towards Industrialization
(International Finance Corporation, Washington, DC, 2019-03-20)Ethiopia has made impressive strides along its developmental path. Job creation is now the critical development challenge, raising the importance of the private sector agenda. After more than a decade of sustained public sector-led growth, the government is revising its growth strategy to allow for a much greater role for the private sector in driving growth and job creation. Broadening the base for job creation beyond light manufacturing toward a wider range of high productivity agricultural and services activities will help to overcome the uneven spatial distribution of manufacturing jobs across the country. Ethiopia has a number of advantages that it can leverage to attract the investment needed for job creation. These include rapidly improving transport and energy infrastructure, low labor costs, a large and growing domestic market, cheap power, an ideal climate, and preferential market access to the European Union, the United States, and other major markets. The purpose of the Ethiopia country private sector diagnostic (CPSD) is to support the transition to a private sector- driven growth model that advances the country’s development objectives and, in particular, delivers the necessary jobs. It identifies investment opportunities that can materialize in the short term, and the reforms that are needed to enable these opportunities to emerge. It also discusses how specific actions by the public sector, in collaboration with the private sector, in filling gaps in public investment, reforming business regulations and trade policy, addressing market failures, and enhancing the efficiency of key backbone services and sectors, while tackling gender inequalities, can fully unleash the potential of private sector investment. -
Publication
Republic of Turkey Reform for Competitiveness Technical Assistance : Fostering Open and Efficient Markets through Effective Competition Policies
(Washington, DC, 2013-09-23)Competition in domestic markets is critical to ensure increased international competitiveness. Firms facing more intense competitive pressures are more likely to introduce new products and upgrade existing product lines. Firms usually acquire many of their inputs (such as transportation, energy, construction, and professional services) in local markets. Competition policies are defined as the set of policies and a law ensuring that competition in the marketplace is not restricted in a way that reduces economic welfare. This report reviews the current status of competition policy in Turkey, focusing on the economy-wide enforcement of competition rules and on specific regulations and government policies that affect product market competition. Economic and legal analysis is used to identify key challenges and to propose specific areas of intervention and reform. In addition, this report provides an evaluation of the potential benefits of pro-competition policies. Turkey is benchmarked against other economies that represent international best practice, as well as regional and global standards, with particular reference to European Union (EU) countries. This study finds that although Turkey has made significant progress in enforcing competition law effectively, it still faces challenges in achieving a comprehensive and coherent policy framework to promote product market competition. The study also finds that there is significant scope to achieve efficiency gains from procompetitive sector policies and more effective economy-wide competition policy enforcement. -
Publication
Sierra Leone Growth Pole Diagnostic : The Growth Poles Program
(Washington, DC, 2013-08)This First Phase Report on Sierra Leone growth poles is the result of a 9 months consultative process led by the Office of the President which specifically requested that the output of this diagnostic be in an engaging format. The fundamental concept of growth poles is that they exploit agglomeration economies and spillover effects to spread resulting prosperity from the core of the pole to the periphery. At the basis of this theory is the assumption that economic development is not uniform over a region. Rather, it concentrates around a geographic feature or economic hub. In particular, it frequently concentrates around a key industry, around which linked industries develop. A growth pole can be used to nurture direct and indirect linkages from the flagship industry to supporting sectors, which vastly expands the employment generation potential of new investments in said flagship industry. The expansion of this key industry implies the expansion of output, employment, related investments, as well as new technologies and new industrial sectors. -
Publication
Zambia - What Would it Take for Zambia’s Beef and Dairy Industries to Achieve Their Potential?
(World Bank, 2011-06-01)This report is a window into a larger initiative, the jobs and prosperity: building Zambia's Competitiveness (JPC) program. The JPC program is a 'joint venture' between the governments of the Republic of Zambia, the Zambian private sector, the United Kingdom's Department for International Development (DFID), the African development bank group and the World Bank Group. As such, the report represents the collective efforts of many people who engaged in this work at different stages in the process. This report is part of a series produced by the World Bank's Africa Finance and Private Sector Development Unit (AFTFP). This report explores the potential contribution that the beef and dairy industries could make to jobs and prosperity in Zambia, and what it will take to achieve this potential. The Zambian government has been looking to increase growth and job creation, and the prosperity resulting from them, by developing a more competitive and diversified economy. This report explores the potential contribution that the beef and dairy industries could make to the government's ambition and sets out what it will take for the industries to achieve their potential. Two main factors provide Zambia with large potential for developing its beef and dairy industries: the country could sustain more than double its current population of cattle; the demand for beef and dairy products in the domestic and regional markets is likely to increase significantly. However, Zambia's beef and dairy industries are currently underperforming and uncompetitive. -
Publication
Zambia - More Jobs and Prosperity in Zambia : What Would it Take? Based on the Jobs and Prosperity : Building Zambia’s Competitiveness Program
(World Bank, 2011-06-01)While Zambia's economy performs well, in macroeconomic terms, low levels of productivity plague industry, and this constrains growth, diversification and prosperity. In recent years, economic growth has averaged 5-6 percent a year, business reforms are being implemented, and investment levels are at an all time high. However, according to the World Economic Forum's global competitiveness index 2010-2011, Zambia is not a competitive place in which to do business (ranking 115th out of 139 countries). Not surprisingly, business productivity tends to be low, and few Zambian industries are internationally competitive. Formal employment is shrinking and rural poverty is increasing. In summary, there is an urgent need to increase productivity, growth and employment. These questions continue to preoccupy policy makers, businesses and civil society especially in light of government's strategy to embrace private sector-led growth and facilitate competitiveness and diversification. The Jobs and Prosperity: Building Zambia's Competitiveness (JPC) Program is an effort to answer these questions and, at the same time, to achieve some concrete results that improve industry productivity and competitiveness. The Zambian government, with support from donors, has, for a long time, been trying to raise prosperity by encouraging more productive businesses, more competitive and diverse industries, and greater employment. Yet these efforts have not generated the results sought. The goal of the JPC Program is to achieve some meaningful progress towards improving industry productivity and competitiveness. The Program focuses on four industries so as to build traction and keep the scope of work manageable. The industries were selected by a group of Zambian stakeholders. The Program facilitated a process through which Zambian stakeholders identified some narrowly defined target results that, if achieved, could help these industries become more productive and then supports initiatives to achieve these results. -
Publication
Zambia - What Would it Take for Zambia’s Copper Mining Industry to Achieve Its Potential?
(World Bank, 2011-06-01)This report is part of a series produced by the World Bank's Africa Finance and Private Sector Development Unit (AFTFP). This report explores the potential contribution that the copper mining industry could make to jobs and prosperity in Zambia, and what it will take to achieve this potential. Copper has for many years played an important role in Zambia's economy, and the performance of the economy has followed the fortunes of copper mining closely. This report investigates the role copper mining could play in achieving the government's objectives of increasing economic growth and jobs in the future. Although 40 percent of the country has not been geologically surveyed, Zambia is recognized by the international mining industry as having good mineral potential. Zambia possesses 6 percent of known world copper reserves. According to the highly-respected Fraser Institute survey of mining and exploration companies, Zambia ranks 26th out of 79 jurisdictions worldwide for mineral potential. In Africa, only the Democratic Republic of Congo (DRC) and Burkina Faso have appreciably higher mineral potential scores.