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Working Paper

Unlocking Potential : Tackling Economic, Institutional and Social Constraints of Informal Entrepreneurship in Sub-Saharan Africa

ADVANCED COUNTRIES ADVERSE INCENTIVE AGRICULTURE BANK POLICY BARRIERS TO ENTRY BINDING CONSTRAINT BUSINESS DEVELOPMENT BUSINESS ENVIRONMENT BUSINESS RISK CAPACITY BUILDING CAPITAL ACCUMULATION CAPITAL CONSTRAINTS CAPITAL INTENSITY CAPITAL INVESTMENT CAPITAL MARKET CAPITAL RETURNS CAPITAL SHORTAGES CAPITAL STOCK COMPETITION POLICIES CONTRACT ENFORCEMENT CREDIT CONSTRAINTS CREDIT MARKET CREDIT PROGRAM CREDIT PROVIDERS DATA ANALYSIS DEGREE OF RISK DEVELOPING COUNTRIES DISTRIBUTION CHANNEL DYNAMIC ECONOMIES E-MAIL ECONOMIC ACTIVITIES ECONOMIC CONSTRAINTS ECONOMIC DEVELOPMENT ELECTRICITY EMPLOYMENT ENTERPRISE PERFORMANCE ENTREPRENEUR ENTREPRENEURSHIP ENTRY BARRIERS EXPANSION EXPENDITURES EXPOSURE FINANCIAL SERVICES FINANCIAL SUPPORT FIRM GROWTH FIRM PERFORMANCE FIRM PERFORMANCES FIRM SIZE FIRMS FORMAL ECONOMY GOVERNMENT REGULATIONS GROWTH POTENTIAL HOLDING HOUSEHOLD INCOMES HOUSEHOLD WEALTH HUMAN CAPITAL IMPACT ASSESSMENT INCENTIVE EFFECTS INCOME INDUSTRIAL DEVELOPMENT INFORMAL ECONOMY INNOVATION INSTITUTIONAL BARRIERS INSTITUTIONAL CONSTRAINTS INSURANCE INTEREST RATES INTERNATIONAL LABOUR ORGANIZATION INVENTORY INVESTING INVESTMENT DECISIONS INVESTMENT OPPORTUNITIES INVESTMENT RATES JOB CREATION LABOR MARKET LAW ENFORCEMENT LEGAL FRAMEWORKS LOAN LOCAL MARKET MANAGERIAL SKILLS MARKET CONSTRAINTS MENU MICRO-CREDIT MICRO-DATA MICROCREDIT MICROENTERPRISES MICROFINANCE MICROFINANCE INSTITUTION MICROFINANCE LOANS MONEY LENDERS NUMBER OF VISITORS OUTPUTS PHONE PHYSICAL CAPITAL INVESTMENTS POVERTY ALLEVIATION PRIVATE SECTORS PRODUCTIVITY RAPID EXPANSION RE-INVESTMENT REMITTANCES REPUTATION RESULT RETURN RISK AVERSE RISK AVERSION RISK-AVERSE INDIVIDUALS SAVINGS SMALL BUSINESSES SMALL ENTERPRISES SMALL FIRM SOCIAL CAPITAL SOCIAL NETWORKS SUPERMARKETS TAX TAXATION TELECOMMUNICATION TOTAL FACTOR PRODUCTIVITY TRANSMISSION TRUST FUND WORKING HOURS WORLD ECONOMY
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World Bank, Washington, DC
Africa | Sub-Saharan Africa | West Africa | Madagascar
2017-06-05T15:33:18Z | 2017-06-05T15:33:18Z | 2011-11

In the past two decades, research on the informal sector has emphasized the heterogeneity of this part of the economy, example in terms of entry costs, firm size, and access to credit, forward- and backward linkages as well as human and physical capital endowments. Yet, not much research has investigated the causes of this heterogeneity and the implied inefficiencies. This is true in particular for Sub-Saharan Africa, where informality dominates urban labor markets. Understanding these causes and the implied inefficiencies is however necessary to design policy interventions that are able to remove the most binding constraints for informal entrepreneurs. This note summarizes the main findings and policy conclusions from a research project that analyzes the quantitative importance of various constraints to informal enterprises in West Africa and Madagascar.

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