Publication: Shortening Supply Chains: Experimental Evidence from Fruit and Vegetable Vendors in Bogota
Loading...
Files in English
776 downloads
Published
2019-08
ISSN
Date
2019-08-16
Author(s)
Editor(s)
Abstract
Small trading activities are a prevalent form of self-employment in developing countries, but their integration into supply value chains is not efficient, especially when it comes to perishable produce. This study tests a novel approach to improve their efficiency by reducing the time and cost of sourcing produce by aggregating purchases through the use of an app and centralized distribution system. Fruit and vegetable vendors in Bogotá currently travel most days to a central market to purchase produce, incurring substantial time and monetary costs. A social enterprise attempted to shorten the supply chain between farmers and vendors by aggregating orders from many small stores, sourcing directly from farmers, and delivering them to the stores. The introduction of this new service was randomized at the market block level. Initial interest was high and offering the service reduced travel time for users by almost two hours a week, reduced travel costs, and increased work-life balance for store owners. Firms offered the service saved an average of 6 to 8 percent on purchase costs, and although some of this passed through into lower prices for consumers, there was incomplete pass-through, so that markups rose. However, stores reduced their sales of products that were not originally offered by this new service, and their total sales and profits appear to have fallen in the short run, with service usage falling over time. The results highlight the potential for new technologies to solve firm coordination problems, offer a window into the nature of competition among small retailers, and point to the challenges in achieving economies of scale when disrupting centralized markets for multi-product firms.
Link to Data Set
Citation
“Iacovone, Leonardo; McKenzie, David. 2019. Shortening Supply Chains: Experimental Evidence from Fruit and Vegetable Vendors in Bogota. Policy Research Working Paper;No. 8977. © World Bank. http://hdl.handle.net/10986/32270 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication Climate and Social Sustainability in Fragility, Conflict, and Violence Contexts(Washington, DC: World Bank, 2026-01-07)Climate change is widely recognized as a driver of violent conflict, but its broader social effects remain less understood. Ignoring these dimensions risks a vicious cycle where climate policies might undermine socially just adaptation. Evidence is still limited on how climate shocks influence political participation, trust, or migration. This paper helps fill that gap by examining links between climate change, conflict, and social sustainability, with a focus on inclusion, resilience, cohesion, and legitimacy. Using secondary data from 2019–24, the study applies simple correlation-based methods to test three hypotheses on the nature, severity, and composition of these associations. The analysis combines multiple climate impact measures, new conflict classifications, recent social sustainability frameworks, and controls for population and geography. The results reveal strong correlations—not causation—between climate events and contexts of fragility, conflict, and violence. Climate impacts are most pronounced in both national and subnational conflict settings. The study also finds robust links between fragility, conflict, and violence and low levels of social sustainability, reflecting its role as both a driver and consequence of conflict. Some dimensions—such as violent events and insecurity—appear weaker in areas most affected by climate shocks. Two of the hypotheses are supported, and one remains inconclusive.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Institutional Capacity for Policy Implementation: An Analytical Framework(Washington, DC: World Bank, 2026-01-07)State capacity is an important prerequisite for policy implementation, yet at the country level it is difficult to measure, assess, and reform. This paper proposes a focus on institutional capacity: the ability of public institutions to implement the specific policy mandates for which they are responsible. Based on a review of existing literature, the paper defines the different dimensions that compose institutional capacity and groups them into two cross-cutting categories: organizational dimensions (personnel, financial resources, information systems, and management practices) and governance dimensions (transparency, independence, and accountability). The paper proposes measures for organizational and governance dimensions using existing data, shows intra-institutional variation of these measures within countries, and discusses how new data could be collected for better measurement of these concepts. Finally, the paper illustrates how the framework can be used to diagnose the sources of common problems related to weak policy implementation.Publication South Africa’s Fragmented Cities: The Unequal Burden of Labor Market Frictions(Washington, DC: World Bank, 2026-01-08)Using high-resolution administrative, census, and satellite data, this paper shows that South African cities are characterized by spatial mismatches between where people live and where jobs are located, relative to 20 global peers. Areas within 5 kilometers of commercial centers have 9,300 fewer residents per square kilometer than expected, which is 60 percent below the global median. Poor, dense neighborhoods are most affected. In Johannesburg, a 10-percentile increase in distance from the nearest business hub corresponds to a 3.7-percentile drop in asset wealth (a proxy of household wellbeing) and 4.9-percentile drop in employment. In Cape Town, the declines are 4.0 and 3.7 percentiles, respectively. Employment is 87 percent lower in the poorest decile than the richest in Johannesburg and 61 percent lower in Cape Town. These findings suggest that South Africa’s spatial organization of people and economic activity constrains agglomeration and reinforces inequality. This methodology provides a scalable and standardized data-driven framework to analyze spatial accessibility and agglomeration frictions in complex, data-constrained urban systems.Publication Investment in Emerging and Developing Economies(Washington, DC: World Bank, 2026-01-07)The world faces a pressing challenge to meet key development objectives amid slowing growth and rising macroeconomic and geopolitical risks. With the number of job seekers rising rapidly, infrastructure shortfalls continuing to be large, and climate costs mounting, the case for a significant investment push has never been stronger. Yet the capacity to respond in many emerging markets and developing economies has eroded. Since the global financial crisis, investment growth has slowed to about half its pace in the 2000s, with both public and private investment weakening. Foreign direct investment inflows—a critical source of capital, technology, and managerial know-how—have also fallen sharply and become increasingly concentrated, leaving low-income countries with only a marginal share. The risks of further retrenchment are significant, as trade tensions, policy uncertainty, and elevated debt levels continue to weigh on investment. Reigniting momentum will require ambitious domestic reforms to strengthen institutions, rebuild macro-fiscal stability, and deepen trade and investment integration—the foundations of a supportive business climate. At the same time, international cooperation is indispensable. A renewed commitment to a predictable system of cross-border trade and investment flows, combined with scaled-up financial support and sustained technical assistance, is essential to help emerging markets and developing economies—especially low-income countries and economies in fragile and conflict situations—bridge financing gaps and implement the domestic reforms needed to restore investment as an engine of growth, jobs, and development.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Shortening Supply Chains for Fruit and Vegetable Vendors in Bogota(World Bank, Washington, DC, 2019-08)The latest note examines the impact of a social enterprise's attempts to shorten the supply chain between farmers and small retail stores in Bogota, an idea that was one of the winners of the SME ideas competition. The small retail stores that are prevalent on many street corners in developing countries face very different supply chains for different products. On one hand, multinational suppliers of branded non-perishable products have amazingly efficient supply chains that result in store-door delivery to even the most remote places. In contrast, the fresh fruit and vegetables they sell are part of what are typically much less efficient supply chains, that often end in centralized wholesale markets, requiring substantial travel time and costs for retail store vendors, and increased food costs for the urban poor. This is the case in Bogota, where the typical store owner gets up at 4:30am each morning, and spends an average of 2 hours travelling to, around, and back from the central market of Corabastos in order to buy fruits and vegetables.Publication Innovative Firms or Innovative Owners? Determinants of Innovation in Micro, Small, and Medium Enterprises(2009-05-01)Innovation is key to technology adoption and creation, and to explaining the vast differences in productivity across and within countries. Despite the central role of the entrepreneur in the innovation process, data limitations have restricted standard analysis of the determinants of innovation to consideration of the role of firm characteristics. The authors develop a model of innovation that incorporates the role of both owner and firm characteristics, and use this to determine how product, process, marketing, and organizational innovations should vary with firm size and competition. They then use a new, large, representative survey from Sri Lanka to test this model and to examine whether and how owner characteristics matter for innovation. The survey also allows analysis of the incidence of innovation in micro and small firms, which have traditionally been overlooked in the study of innovation, despite these firms comprising the majority of firms in developing countries. The analysis finds that more than one-quarter of the microenterprises are engaging in innovation, with marketing innovations the most common. As predicted by the model, firm size has a stronger positive effect, and competition a stronger negative effect, on process and organizational innovations than on product innovations. Owner ability, personality traits, and ethnicity have a significant and substantial impact on the likelihood of a firm innovating, confirming the importance of the entrepreneur in the innovation process.Publication Afghanistan : Economic Incentives and Development Initiatives to Reduce Opium Production(2008-02)This report is about how to progressively reduce over time Afghanistan's dependence on opium - currently the country's leading economic activity - by development initiatives and shifting economic incentives toward sustainable legal livelihoods. Specifically, the report identifies additional investments and policy and institutional measures to support development responses that can counterbalance the economic advantages of opium. It analyzes ways to change the relative incentives between licit and illicit cropping and to help enhance rural livelihoods for the poor, under better governance and security conditions. The report puts forward concrete recommendations and the expected impacts on growth, poverty reduction and the opium economy are assessed. The report first briefly discusses the policy context (Chapter 1) and provides an overview of the opium economy (Chapter 2), focusing on how different segments of the rural population interact with it. The report then analyzes the scope for increasing value added, competitiveness and productivity in agriculture (Chapter 3) and for promoting enterprise development and off-farm employment (Chapter 4). The complementary role of further investments in rural infrastructure is examined in Chapter 5, and measures for strengthening governance are analyzed in Chapter 6. In Chapter 7 issues that cut across all counter narcotics efforts are examined. A final chapter looks at implementation, and at issues of prioritization, synergies and phasing (Chapter 8). The recommendations of the report are encapsulated in a matrix at the end of the Executive Summary.Publication Teaching Personal Initiative Beats Traditional Training in Boosting Small Business in West Africa(American Association for the Advancement of Science, 2017-09-22)Standard business training programs aim to boost the incomes of the millions of self-employed business owners in developing countries by teaching basic financial and marketing practices, yet the impacts of such programs are mixed. We tested whether a psychology-based personal initiative training approach, which teaches a proactive mindset and focuses on entrepreneurial behaviors, could have more success. A randomized controlled trial in Togo assigned microenterprise owners to a control group (n = 500), a leading business training program (n = 500), or a personal initiative training program (n = 500). Four follow-up surveys tracked outcomes for firms over 2 years and showed that personal initiative training increased firm profits by 30%, compared with a statistically insignificant 11% for traditional training. The training is cost-effective, paying for itself within 1 year. This is the author's version of the work. It is posted here by permission of the AAAS for personal use, not for redistribution. The definitive version was published in Science Vol 357, issue 6357: 1287-90.Publication Radio Frequency (Un)Identification : Results from a Proof-of-Concept Trial of the Use of RFID Technology to Measure Microenterprise Turnover in Sri Lanka(World Bank Group, Washington, DC, 2014-10)Accurate measurement of stock levels, turnover, and profitability in microenterprises in developing countries is difficult because the majority of these firms do not keep detailed records. This paper tests the use of radio frequency identification tags as a means of objectively measuring stock levels and stock flow in small retail firms in Sri Lanka. In principle, the tags offer the potential to track stock movements accurately. The paper compares the stock counts obtained from RFID reads to physical stock counts and to survey responses. There are three main findings. First, current RFID-technology is more difficult to use, and more time-consuming to employ, than had been envisaged. Second, the technology works reasonably well for paper products, but very poorly for most products sold by microenterprises: on average only about one-quarter of the products tagged could be read and there was considerable day-to-day variation in read-efficiency. Third, a comparison of survey responses and physical stock-takes shows much higher accuracy for survey measures. As a result, the study concludes that this technology is currently unsuitable for improving stock measurement in microenterprises, except perhaps for a few products.
Users also downloaded
Showing related downloaded files
Publication Improving the Well-Being of Adolescent Girls in Developing Countries(World Bank, Washington, DC, 2021-11)This paper conducts a large, narrative literature review of interventions that seek to (1) increase educational attainment, (2) delay childbearing, and/or (3) delay marriage for adolescent girls in developing countries. Using 104 interventions from 70 studies, predominantly in developing countries, the paper summarizes the performance of 16 categories of interventions in improving each of the three outcomes of interest. It then provides high-level policy strategies to improve each outcome, informed by this review. Finally, the paper discusses several promising future research avenues to help close knowledge gaps and, thus, improve policy guidance for enhancing the well-being of adolescent girls in developing settings.Publication Tracking Universal Health Coverage(World Health Organization and World Bank, 2021-12-13)Health is a fundamental human right, and universal health coverage (UHC) is critical for achieving that right. UHC represents the aspiration that good quality health services should be received by everyone, when and where needed, without incurring financial hardship. This ambition was clearly stated as a target in the United Nations Agenda 2030 for Sustainable Development and reaffirmed when world leaders endorsed the Political Declaration of the United Nations High-level Meeting on Universal Health Coverage in September 2019, the most comprehensive international health agreement in history. Beyond health and wellbeing, UHC also contributes to social inclusion, gender equality, poverty eradication, economic growth and human dignity. This report reveals that pre-pandemic, gains in service coverage were substantial and driven by a massive scaling up of interventions to tackle communicable diseases, such as HIV, tuberculosis and malaria. And while impoverishing health spending has decreased in recent years, the number of people impoverished or further impoverished by out of pocket health spending has remained unacceptably high. These trends are exacerbated by substantial and persistent inequalities between and within countries. The COVID-19 pandemic has subsequently led to significant disruptions in the delivery of essential health services. Rising poverty and shrinking incomes resulting from the global economic recession are likely to increase financial barriers to accessing care and financial hardship owing to out of pocket health spending for those seeking care, particularly among disadvantaged populations. The pre-COVID challenges, combined with additional difficulties arising from the pandemic, brings an even greater urgency to the quest for UHC. Strengthening health systems based on strong primary health care (PHC) is crucial to building back better and accelerating progress towards UHC and health security. Effective implementation of PHC-oriented health systems enables greater equity and resilience, with greater potential to deliver high-quality, safe, comprehensive, integrated, accessible, available and affordable health care to everyone, everywhere, but most especially the most vulnerable. Substantial financial investments in PHC-oriented building blocks of health systems, particularly in the areas of greatest expenditure (health and care workforces, health infrastructure, medicines and other health products) should be supported, carefully planned and informed by health system performance data to address critical gaps, particularly in low-income and lower-middle income countries. There is also an urgent need to remove remaining barriers in order to enable access to health care for all. Key barriers to UHC progress include poor infrastructure, with limited availability of basic amenities, weaknesses in the design of coverage policies to limit the harmful effects of out of pocket payments particularly for the poor and those with chronic health service needs, shortages and inefficient distribution of qualified health workers, prohibitively expensive good quality medicines and medical products, and lack of access to digital health and innovative technologies. Maintaining progress towards UHC is likely to be challenging. UHC is first and foremost a political choice. It is also a moral imperative to guarantee the right to health for all. More than ever before, strong political commitment from world leaders and partners organizations is the essential ingredient for overcoming barriers.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication What Do Teachers Know and Do? Does It Matter?(World Bank, Washington, DC, 2017-01)School enrollment has universally increased over the past 25 years in low-income countries. However, enrolling in school does not guarantee that children learn. A large share of children in low-income countries learn little, and they complete their primary education lacking even basic reading, writing, and arithmetic skills—the so-called "learning crisis." This paper uses data from nationally representative surveys from seven Sub-Saharan African countries, representing close to 40 percent of the region's total population, to investigate possible answers to this policy failure by quantifying teacher effort, knowledge, and skills. Averaging across countries, the paper finds that students receive two hours and fifty minutes of teaching per day—or just over half the scheduled time. In addition, large shares of teachers do not master the curricula of the students they are teaching; basic pedagogical knowledge is low; and the use of good teaching practices is rare. Exploiting within-student, within-teacher variation, the analysis finds significant and large positive effects of teacher content and pedagogical knowledge on student achievement. These findings point to an urgent need for improvements in education service delivery in Sub-Saharan Africa. They also provide a lens through which the growing experimental and quasi-experimental literature on education in low-income countries can be interpreted and understood, and point to important gaps in knowledge, with implications for future research and policy design.Publication Digital innovation in SMEs(Taylor and Francis, 2021-03-09)This paper presents a systematic literature review on digital innovation in Small and Medium-sized Enterprises (SMEs). It aims to synthesize previous research and identify knowledge gaps and future research opportunities. A systematic review of the literature was carried out by analyzing 382 articles published between 1979 and 2019. From synthesizing the extant literature, we developed a theoretical framework advocating that digital innovation in SMEs is driven by a configuration of antecedents, goes through different stages of innovation process, and leads to organizational and business process performance outcomes. Using an in-depth content analysis, we discuss the examined digital technologies, theories underpinning digital innovation in SMEs research, contextual orientations, and the content of research in this field. This review identifies significant knowledge gaps in relation to theory, context, method and content.