Publication: Improving the Rural Investment Climate for Businesses: Key to Rural Income Generation
Loading...
Published
2012-02
ISSN
Date
2017-06-05
Author(s)
Editor(s)
Abstract
An appropriate rural investment climate (RIC) is essential for rural businesses to be successful and generate employment and income in their communities. Improving the investment climate could facilitate income-generation activities in both farm and nonfarm sectors, thus reducing rural poverty. Nonfarm sector focused growth, combined with agricultural growth, and has been shown by Delgado et al. (1998) to have a significant impact on the local economy through the generation of employment and income. This study is the first to focus on both farm and nonfarm enterprises in its 2010 surveys of RIC in Yemen, Burkina Faso, Nigeria, and Mozambique unlike six previous RIC assessment (RICA) pilot projects that focused only on nonfarm enterprises. This report assesses the weaknesses and strengths of all RIC components in farm and nonfarm enterprises of the four countries surveyed, and recommends measures to address the weaknesses. The report identifies similar business obstacles for farm and nonfarm enterprises and four critical areas of the RIC to be improved. The results of the RICA are based on analyses of obstacles perceived by rural entrepreneurs and on assessments by RIC indicators, enterprise entry and exit, and enterprise performance. To have maximum synergy effects, farm and nonfarm enterprises should be promoted together.
Link to Data Set
Citation
“Sawada, Naotaka. 2012. Improving the Rural Investment Climate for Businesses: Key to Rural Income Generation. Agriculture and Rural Development Discussion Paper;No. 51. © World Bank. http://hdl.handle.net/10986/26897 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Promoting the Rural Farm and Nonfarm Businesses : Evidence from the Yemen Rural Investment Climate(World Bank, Washington, DC, 2012-07)This study examines the major constraints of rural business entry and performance in Yemen. The Yemen rural investment climate survey made it possible to analyze rural investment climate constraints for rural businesses. The survey was used to investigate both farm and nonfarm rural enterprises. The rural investment climate was assessed using a combination of subjective impressions related by rural entrepreneurs, and a more objective, empirical set of analyses that employed indicators to rank the constraints to "doing business" in the areas surveyed. These empirical analyses included application of the entry model, the performance model, the closure model, and the migration model. The migration model was introduced to identify how the rural investment climate variables at the community level increase migration and economic activities. Based on the assessment of the rural investment climate, this paper identifies and explains four critical areas in which the rural investment climate in Yemen can be improved: market demand, access to markets, access to finance, and the provision of business services. Because farm and nonfarm businesses often experience common or similar constraints, the climate in which they operate can often be improved with the same measures and policies. Addressing the constraints that affect rural women entrepreneurs in particular, who play a vital role in rural nonfarm enterprises, warrants clear priority as a means to generate income and employment. Security and labor issues are identified as the key such constraints that disproportionately affect women.Publication The Investment Climate in South Asia : Volume 2. Country Profiles(World Bank, Washington, DC, 2007-01)This report summarizes the findings of Investment Climate Assessments (ICAs) carried out for all countries in the South Asia region. It compares South Asian countries to countries in other regions, analyzes similarities and differences within the region, and identifies the way forward in improving the investment climate. The first volume analyzes similarities and differences within the region and between South Asia and the comparator countries. Chapter 1 assesses the investment climate in South Asia vis-a-vis a number of comparator countries. Chapter 2 analyzes the dimensions of the South Asian investment climate. Chapter 3 highlights the costs imposed by deficiencies in the investment climate. Chapter 4 reviews the policy recommendations proposed by the various lCA surveys for the different dimensions identified: infrastructure (power, transportation), factors of production (finance, labor market and skills, technology), regulatory burden and corruption, and risk and uncertainty (policy predictability, judicial reforms, security). The second volume provides the detailed and standardized country-specific data underpinning the analysis in Volume 1.Publication The Investment Climate in South Asia : Volume 1(World Bank, Washington, DC, 2006-09)This report summarizes the findings of Investment Climate Assessments (ICAs) carried out for all countries in the South Asia region. It compares South Asian countries to countries in other regions, analyzes similarities and differences within the region, and identifies the way forward in improving the investment climate. The first volume analyzes similarities and differences within the region and between South Asia and the comparator countries. Chapter 1 assesses the investment climate in South Asia vis-a-vis a number of comparator countries. Chapter 2 analyzes the dimensions of the South Asian investment climate. Chapter 3 highlights the costs imposed by deficiencies in the investment climate. Chapter 4 reviews the policy recommendations proposed by the various lCA surveys for the different dimensions identified: infrastructure (power, transportation), factors of production (finance, labor market and skills, technology), regulatory burden and corruption, and risk and uncertainty (policy predictability, judicial reforms, security). The second volume provides the detailed and standardized country-specific data underpinning the analysis in Volume 1.Publication Sustainable Support System for Rural Women Entrepreneurs(World Bank, Washington, DC, 2011-06)Nonfarm sector development in rural Ethiopia is central to generating employment and income and thereby reducing poverty. The improved investment climate could facilitate investments in farm and nonfarm sectors by contributing directly and indirectly to the generation of additional employment for women and men. Ethiopia Industrial Development Strategy 2003 involved efforts to create an enabling environment for the private sector to be a driving force for economic development. The sectoral focus of the strategy is on the development of agro-based industries and on strengthening nonfarm sector. The sustainable support system for rural women entrepreneurs is based on five main components: (i) women's economic empowerment, (ii) market development, (iii) access to markets, (iv) business management support services, and (v) access to credit. Necessary conditions to support nonfarm economic activities, such as physical market development, feeder roads, and transport, will also benefit agriculture and create a virtuous circle of increasing farm and nonfarm income. Women are more likely to be involved in and benefit from nonfarm enterprise activities. Although the system proposed could be targeted at men and women, women could be the main beneficiaries of the support system. This sustainable system is new and innovative in directly supporting the rural poor and women by building the capacity of entrepreneurs and supporting institutions linked to the existing projects. This system may derive maximum synergy effects by integrating with the Agricultural Growth Project (AGP) and the Household Assets Building Program (HABP) of the Productive Safety Nets Project (PSNP) in a complementary relationship.Publication Small Enterprise Growth and the Rural Investment Climate : Evidence from Tanzania(World Bank, Washington, DC, 2008-07)This paper analyzes characteristics of nonfarm enterprises, their employment growth patterns, and constraints in doing business in rural Tanzania. Using unique survey data, the authors describe a low-return sector struggling to compete in a difficult business environment. However, about one-third of rural enterprises are growing fast. Most enterprises engage in agricultural trade. Due to a rapidly growing agricultural sector in recent years, limiting demand-side constraints, rural enterprise constraints in Tanzania mainly operate from the supply side. This suggests that, in particular, access to finance, road infrastructure, and rural cell phone communication is correlated with employment growth. A major finding is that subjective and objective measurements of business constraints are broadly comparable. The authors discuss a number of factors that would help to unleash the full potential of private sector-led growth in rural areas. The findings show that marginal improvements in the rural investment climate matter for growth.
Users also downloaded
Showing related downloaded files
Publication June 2025 Update to the Poverty and Inequality Platform (PIP)(Washington, DC: World Bank, 2025-06-11)The June 2025 update to the Poverty and Inequality Platform (PIP) introduces several important changes to the data underlying the global poverty estimates. The most important change is the adoption of the 2021 Purchasing Power Parities (PPPs). In addition, new data for India has been incorporated and the existing series adjusted for comparability. This document details the changes to underlying data and the methodological reasons behind them. Depending on the availability of recent survey data, global and regional poverty estimates are reported up to 2023, together with nowcasts up to 2025. The PIP database now includes 74 new country-years, bringing the total number of surveys to over 2,400, for 172 economies.Publication Nepal Infrastructure Sector Assessment(World Bank, Washington, DC, 2019-02-28)Despite several severe shocks in the past, conflict, unstable governments, earthquakes, and trade disruptions, Nepal has made strong progress in reducing poverty and boosting shared prosperity. With the decade-long peace and constitutional process concluded, the Government of Nepal is keen to accelerate economic growth and become a middle-income country by 2030. Between 1996 and 2011, the proportion of households living in extreme poverty fell from 46 to 15 percent. Nepal's macroeconomic fundamentals have remained sound. This report takes place as Nepal transitions to a federal structure. This poses a unique and unprecedented opportunity to establish clarity of functions, expenditures, and revenue assignments, as well as changing jurisdictions across various levels of governments and agencies, including as they interface with the private sector. The new government is in place and emphasizing the need for stronger cooperation between the public and private sectors. Against this background, this report assesses the energy (electricity generation, transmission, and distribution), transport (roads, airports, and urban transport), and urban (water supply, sanitation, and solid waste management) infrastructure sectors. The report recommends interventions that combine short-term and longer-term structural and policy changes with tailored project implementation approaches. Completing projects will help stress test the framework and system and identify potential bottlenecks that can be corrected. Such a learning-by-doing approach will further help prioritize the implementation of the initiatives proposed in this report and target capacity development initiatives in the areas of greatest need.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 Deposit Insurance around the World : A Comprehensive Database(World Bank, Washington, DC, 2005-06)This paper updates the Demirguç-Kunt and Sobaci (2001) cross-country deposit insurance database and extends it in several important dimensions. This new data set identifies both recent adopters and the ones that were not covered earlier due to a lack of data. Moreover, for the first time, it provides historical time series for several variables and adds new ones. The data were collected by surveying deposit insurance institutions and related agencies as well as through the use of various other country sources.Publication Agriculture Investment Sourcebook(Washington, DC: World Bank, 2005)This Sourcebook has been prepared to help in implementing the World Bank's current rural strategy, by sharing information on investment options and innovative approaches that will aid the design of future lending programs for agriculture. The Sourcebook provides generic good practices and many examples that demonstrate that investment in agriculture can provide rewarding and sustainable returns to development efforts. The contents have been assembled from all regions and thematic groups of the Bank, and from the experiences of many partners. The Sourcebook is intended as a ready reference for practitioners (World Bank staff and their partners in borrowing countries) seeking summary information on the state of the art about good practice for agricultural investments, and innovative activities that merit close monitoring for potential scaling up. The Sourcebook is divided into eleven self-contained modules. Each module contains three different types of subunits, which can also be stand-alone documents. The Sourcebook thus provides introductions to topics, but not detailed guidelines on " how to " design and implement investments. The standalone nature of each subunit of the Sourcebook allows flexibility and adaptability of the materials, but necessarily results in some replication of the issues covered.