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In Africa's least developed countries (LDCs), escape from poverty and convergence to living standards of more advanced economies depends critically on structural transformation and the emergence of productive entrepreneurship that would accelerate growth and job creation. So far, however, subsistence agriculture has been the main source of employment in these countries, while a dynamic private sector in industry or high value-added services has remained elusive. Utilizing the flow approach to labor markets, this paper complements the empirical literature and numerous surveys on small and medium enterprise (SME) constraints and develops a theoretical framework that examines the main obstacles to entrepreneurship in Africa's LDCs. The paper posits that given the persistent frictions in product and labor markets as well as skill shortages that characterize these economies, development of productive entrepreneurship cannot be left to markets alone. The policy analysis suggests that the state has an important role to play. Well-targeted government interventions including training of potential entrepreneurs and workers can help to establish more modern and highly productive SME clusters that Africa's LDCs need. [ABSTRACT FROM AUTHOR]

This paper studies the emergence of developing countries from a development trap. It shows that countries whose dynamics exhibits several growth peaks can be considered as cases of equilibrium jump. Applying this criterion to a sample of 65 countries that were initially very poor in 1950, it identifies 13 such countries, called 'emerging economies'. Comparing emerging and non-emerging economies in the 1950s and early 1960s, it shows that economic take-offs starting in the 1960s can be related to health and education in the early 1950s, while other possible factors, such as savings, openness and democracy are not significant. [ABSTRACT FROM AUTHOR]

Despite the global financial and economic crisis, China has continued to experience strong export-driven growth and, indeed, became the world's largest exporting country in 2009. This rise of China in international markets presents African countries with growing competition in their home and export markets, but also with new opportunities. This paper focuses on the impacts of these developments on countries in North Africa, which are directly affected by the prominence of Chinese manufacturing. In particular, the analysis addresses two policy questions: First, is competition from China leading to substantial displacement of resources that incur significant adjustment costs while moving to new activities, or are there opportunities to exploit finer patterns of specialization that entail less disruption? And second, will policies that mitigate the impact of competition from China limit the longer-term capacity to exploit new opportunities in the global market? The findings from the empirical analysis suggest that policy makers can support North African producers in the increasingly fierce competition with China by reviewing the regulatory and incentives environment, reducing trade logistics costs, and broadening trade promotion efforts to non-traditional markets. [ABSTRACT FROM AUTHOR]

Africa's economies have diverged from other developing regions: over the past three decades growth has been much slower. In this paper I relate this to the region's distinctive physical and political geography. These features not only make Africa different from other regions, they make some parts of Africa radically different from others. Understanding these differences is critical because they imply equally substantial differences in opportunities and hence in the strategies likely to be effective for growth. No pan-African growth strategy offers a realistic prospect of success, nor can Africa simply copy the strategies of successful regions that have fundamentally different physical or political geography. I propose three strategies each of which is likely to be appropriate for a part of the region. [ABSTRACT FROM AUTHOR]

This paper investigates the possible effects of the US reform of the international settlement rate system on telecommunications investment in Africa. We estimate a telecommunications investment equation using a panel data of 51 African countries during the 1991–2003 period and find that settlement payments have significantly positive effects on telecommunications investment in African countries. A 10 percent increase in settlement payment, on average, increases the telecommunications investment expenditure to GDP ratio by 3.4 percent over a three-year period. Using previously calculated revenue loss from the US reform, our estimates suggest that African countries stand to lose between 4.4 to 11 percentage points of their telecommunications investment in the medium run and with it, possible decreases in income growth rate. However, we argue that African countries can counter the effects of this revenue loss by increasing the efficiency of telecommunications investment through appropriate market restructuring, including the promotion of competition and privatization. [ABSTRACT FROM AUTHOR]

This paper examines the determinants of technical and allocative efficiency of micro-enterprises in the Nigerian economy, using cross-sectional data collected on 180 micro-enterprises selected from block-making, metal fabricating and sawmilling enterprises. The Nigerian government has put in efforts at promoting productivity and efficiency in both the public and private sector of the economy. As a developing country, Nigeria has immense potential for better economic growth, both in the short and long run. It then becomes important to know the current level of efficiency within the sector. Quantitative estimates obtained from the stochastic frontier production function indicated a wide variation, in technical and allocative efficiencies within and across occupational groups and across operational scale. The wide variation in the level of efficiency is an indication that there is ample opportunity for these enterprises to raise their level of efficiency. While the level of education of enterprise owners was found to be highly significant in affecting the level of efficiency of the micro-enterprises, the age of enterprise owners was round to be negatively related to their level of efficiency. These variables are important factors that government policy should address so as to improve the current level of efficiency in the sector. [ABSTRACT FROM AUTHOR]