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The Economic Implications of a Comprehensive Approach to Learning on Industrial Policy The Case of Ethiopia
Abstract
Industrialization is the key for sustainable economic growth in Africa. The role of industrial policy has been discussed intensively recently. This paper sheds light on the learning (or learning how to learn) aspect of industrialization policy, proposing a comprehensive approach. A great deal of past literature focuses only on the technological aspects of learning, but industrialization is a multi-faceted task, covering policy planning, policy implementation, and managerial knowledge. This paper took up a case from Ethiopia. The case study confirmed that learning on managerial knowledge improved performance of private firms. It also confirmed that policy learning expanded the policy scope of the government to help private sector development. These two aspects are inseparable, and this comprehensive approach should be used by donor countries for the industrialization of Africa.
... However, productivity growth is a double-edged sword. This is because, on the one hand, although it improves a firm's performance, on the other, it means firms can operate with fewer workers (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). Further, since most technological innovations tend to be labor saving technologies, productivity growth could have negative consequences on the lives of workers if they lose their jobs. ...
... 3 uS aId to JaPan: JaPan'S exPerIence IntroducIng Kaizen to create SocIal InnovatIon Japan introduced Kaizen in 1955 with assistance from the United States. As we will see in detail, there were three different aims for that introduction by each stakeholder: Japanese firms; the United States; and labor (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , b, 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). First, for Japanese firms, the main objective was to increase production with less labor. ...
... Therefore, it was natural for the US government to support the productivity movement in Japan, as Japan was strategically important in East Asia. In 1951, a plan was drafted in Japan to establish a productivity organization with support from the FOA (Foreign Operation Administration) of the US government (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). 12 ...
Kaizen normally refers to the Japanese approach toward improving quality and productivity. What distinguishes Kaizen from other approaches is that these goals are attained through its process—one in which learning and inclusiveness are essential. The sustainable development goals (SDGs) call on member states to promote sustained, inclusive, and sustainable economic growth and decent work for all. Kaizen can contribute to achieving the kind of growth characterized by these attributes. In this chapter, I begin by providing an analytical perspective and discussion of key issues related to Kaizen (Sect. 1). Based on this discussion, I then review the goals, tools/methods, and process of Kaizen (Sect. 2). In Sect. 3, I discuss the relationship between Kaizen and the targets of the SDGs as well as learning, transformation, and quality of growth. In Sect. 4, I analyze outstanding experiences of Japan, the United States, Singapore, Thailand, and Tanzania which have introduced Kaizen or similar approaches in order to gather insights on the above-mentioned relationship.
... However, productivity growth is a double-edged sword. This is because, on the one hand, although it improves a firm's performance, on the other, it means firms can operate with fewer workers (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). Further, since most technological innovations tend to be labor saving technologies, productivity growth could have negative consequences on the lives of workers if they lose their jobs. ...
... 3 uS aId to JaPan: JaPan'S exPerIence IntroducIng Kaizen to create SocIal InnovatIon Japan introduced Kaizen in 1955 with assistance from the United States. As we will see in detail, there were three different aims for that introduction by each stakeholder: Japanese firms; the United States; and labor (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , b, 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). First, for Japanese firms, the main objective was to increase production with less labor. ...
... Therefore, it was natural for the US government to support the productivity movement in Japan, as Japan was strategically important in East Asia. In 1951, a plan was drafted in Japan to establish a productivity organization with support from the FOA (Foreign Operation Administration) of the US government (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). 12 ...
The widening and deepening of the Global Value Chain (GVC) is providing new opportunities for developing countries to promote industrialization. This chapter focuses on the firm capabilities and analyzes whether Kaizen can promote domestic firms to join the GVC, using the Mexican automotive industry as a case study. This chapter introduced the concept of GVC stages and tested the hypothesis that Kaizen has positive impact on automotive parts suppliers for upgrading in GVC stages and then to business expansion. The results showed that the majority suppliers, which received Kaizen training, improved or maintained positions in the GVC when compared with other suppliers.
... However, productivity growth is a double-edged sword. This is because, on the one hand, although it improves a firm's performance, on the other, it means firms can operate with fewer workers (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). Further, since most technological innovations tend to be labor saving technologies, productivity growth could have negative consequences on the lives of workers if they lose their jobs. ...
... 3 uS aId to JaPan: JaPan'S exPerIence IntroducIng Kaizen to create SocIal InnovatIon Japan introduced Kaizen in 1955 with assistance from the United States. As we will see in detail, there were three different aims for that introduction by each stakeholder: Japanese firms; the United States; and labor (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , b, 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). First, for Japanese firms, the main objective was to increase production with less labor. ...
... Therefore, it was natural for the US government to support the productivity movement in Japan, as Japan was strategically important in East Asia. In 1951, a plan was drafted in Japan to establish a productivity organization with support from the FOA (Foreign Operation Administration) of the US government (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). 12 ...
The Ethiopian government began to pilot Kaizen in 2009 and established the Ethiopia Kaizen Institute (EKI) in 2011 to scale up Kaizen in the country. EKI estimated that the benefits of Kaizen implementation between 2011 and 2016 reached US$105 million. The chapter points out three factors to create the positive results of Kaizen: (1) the proactive role of the government as a promoter of Kaizen is essential, (2) mindset change of people through Kaizen application is effective in Ethiopian context as a process of core capacity development of individuals, and (3) no one is really affected negatively by Kaizen especially with regard to job security in contrast with other reform processes.
... However, productivity growth is a double-edged sword. This is because, on the one hand, although it improves a firm's performance, on the other, it means firms can operate with fewer workers (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). Further, since most technological innovations tend to be labor saving technologies, productivity growth could have negative consequences on the lives of workers if they lose their jobs. ...
... 3 uS aId to JaPan: JaPan'S exPerIence IntroducIng Kaizen to create SocIal InnovatIon Japan introduced Kaizen in 1955 with assistance from the United States. As we will see in detail, there were three different aims for that introduction by each stakeholder: Japanese firms; the United States; and labor (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , b, 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). First, for Japanese firms, the main objective was to increase production with less labor. ...
... Therefore, it was natural for the US government to support the productivity movement in Japan, as Japan was strategically important in East Asia. In 1951, a plan was drafted in Japan to establish a productivity organization with support from the FOA (Foreign Operation Administration) of the US government (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). 12 ...
This open access book provides a glimpse into the Japanese management technique known as “Kaizen,” and the ways it has been disseminated around the developing world. The novelty of this book is three-fold: it provides a contextualized view of the mechanisms of initiatives implementing Kaizen in developing countries; compared with productivity studies, it places the relationship between workers and managers at the center of inquiry, reflecting the intent of SDG8 concerning decent work and economic growth; and it provides an overview of the heterogeneity of Kaizen in terms of geography and firm size.
This book explores how improving management techniques can support firms’ productivity and quality. Given its wide range of case studies from across Africa, Asia and Latin America, this book will be of value to scholars, policymakers and advocates of sustainable development alike.
Akio Hosono is senior research adviser to the JICA Research Institute. Holding a doctorate in economics from the University of Tokyo, he has held a variety of academic posts, including a period as Director of the JICA Research Institute from 2011 to 2013.
John Page is a Senior Fellow in the Global Economy and Development Program at the Brookings Institution in Washington, DC and has held positions at Princeton University, USA, the World Bank, Oxford University, UK, and the National Graduate Institute for Policy Studies, Tokyo, Japan.
Go Shimada is an Associate Professor of Meiji University and a visiting scholar at the JICA Research Institute. He holds a PhD from Waseda University.
... However, productivity growth is a double-edged sword. This is because, on the one hand, although it improves a firm's performance, on the other, it means firms can operate with fewer workers (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). Further, since most technological innovations tend to be labor saving technologies, productivity growth could have negative consequences on the lives of workers if they lose their jobs. ...
... 3 uS aId to JaPan: JaPan'S exPerIence IntroducIng Kaizen to create SocIal InnovatIon Japan introduced Kaizen in 1955 with assistance from the United States. As we will see in detail, there were three different aims for that introduction by each stakeholder: Japanese firms; the United States; and labor (Shimada 2015a(Shimada , 2017a(Shimada , 2018a(Shimada , b, 2019Shimada and Sonobe 2018;Higuchi and Shimada 2019). First, for Japanese firms, the main objective was to increase production with less labor. ...
One of the most important global issues we face today is rising inequality in both developed and developing countries. Even if the inequality between countries has converged with the economic growth of emerging states, domestic inequality has worsened. In regional terms, even if the overall economic gap has lessened, African countries still lag behind those in other regions. To change this situation, industrial sector development is certainly important, but to catch up, what African countries need to do is twofold. The first is to move their production possibility frontier (PPF) outward (movement of the PPF curve itself) with innovations. The second way is to assist average firms to reach their production possibility frontier using existing technology (movement toward the frontier). However, these changes may not be enough to tackle the issue of rising inequality in each country. We cannot expect the benefit of industrial development or firm growth to easily trickle down to the poor. Then, how can we make industrial development work for the poor? This chapter tries to answer this question looking back at Japan’s experience.
... In the long run, this could change the comparative advantage of agriculture in Africa. Other than the Dutch disease effect, as discussed in Shimada (2015c and2016c), there are market failures. It is known that under the asymmetry of information problem, investment by private firms is less than optimal because the return from their investment is uncertain. ...
... This is against Petty-Clark's law, which says that the main driver of sector has changed over time from primary industry to secondary, and to the tertiary sector. The major reason for this premature shift was the 'Dutch disease' effect (Shimada 2015c;2016c). Since Africa is rich in natural resources, currencies tend to be overvalued, and this makes imports cheaper, and exports more expensive. ...
... Comparing these, the economic transformation of Africa clearly prematurely shifted to the service sector, bypassing the industrial sector. The major reason for this premature shift was the Dutch disease effect (Shimada 2015c). Since Africa is rich in natural resources, currencies tend to be overvalued, and this makes imports cheaper, and exports more expensive. ...
... Other than the Dutch disease effect, as discussed in Shimada (2015c;2016c), there are market failures. It is known that under the asymmetry of information problem, investment by private firms is less than optimal because the return from their investment is uncertain. ...
... Comparing these, the economic transformation of Africa clearly prematurely shifted to the service sector, bypassing the industrial sector. The major reason for this premature shift was the Dutch disease effect (Shimada (2015c and2016c). Since Africa is rich in natural resources, currencies tend to be overvalued, and this makes imports cheaper, and exports more expensive. ...
... Other than the Dutch disease effect, as discussed in Shimada (2015c and2016c), there are market failures. It is known that under the asymmetry of information problem, investment by private firms is less than optimal because the return from their investment is uncertain. ...
... Comparing these, the economic transformation of Africa clearly prematurely shifted to the service sector, bypassing the industrial sector. The major reason for this premature shift was the Dutch disease effect (Shimada (2015c;2016c). Since Africa is rich in natural resources, currencies tend to be overvalued, and this makes imports cheaper, and exports more expensive. ...
... Other than the Dutch disease effect, as discussed in Shimada (2015c;2016c), there are market failures. It is known that under the asymmetry of information problem, investment by private firms is less than optimal because the return from their investment is uncertain. ...
After a huge natural disaster, what are the factors that make recovery of the society possible? This paper examines how social capital has worked in the process of recovery and reconstruction in Kobe, Japan, since the Great Hanshin Awaji Earthquake in 1995. After ten years, the population of Kobe returned to its pre-earthquake level. It looks as though the city has recovered well. However, if we look closer, ward-by-ward data gives a different picture. Even if each ward suffered a similar level of damage, some have recovered faster than others. For this reason, this paper looks further into the factors that caused this difference. To analyze these factors, this paper focuses on the tertiary sector within Kobe because there has been a structural shift away from the secondary sector due to the damage caused by the earthquake. Additionally, the tertiary sector accounted for 80% of employment, the most important factor for reconstruction over the mid- and long-term. The paper uses panel data from 1995 to 2010, and employs social capital proxies, such as households where three generations live together and crime rates, to examine the factors of recovery. The empirical analysis found that social capital is the factor that generates more jobs in the tertiary sector, thus, the factor that created the differences in the pattern of recovery among wards. The findings indicate the ways a recovery can be made faster after future natural disasters so as to create resilient societies.
... Further, social capital also helps to rebuild industries promoting information sharing among entrepreneurs and within industrial clusters (Nam, Sonobe, and Otsuka 2009;Shimada 2013). For instance, Barr (2000) discusses a social network among entrepreneurs in Ghana that catalyzes information exchange on new technology. ...
... Distribution of Natural Disasters, Five Regions, 1945-2013 Number of disasters Source: Based on the data by the EM-DAT/CREDS. a. ...
... According to these entrepreneurs, Kaizen helped workers (including middle managers) experience a series of incremental improvements in efficiency, safety, or product quality and gain confidence that they could work together and achieve targets. 3 This is the view shared by Kaizen practitioners but not yet empirically supported (e.g., Shimada, 2015aShimada, , 2015bShimada, , 2017aMekonen, 2018). ...
There is an increasing interest in the impact assessment of management training programs. Among various types of training, this study focuses on those featuring Kaizen, a standard approach to production management and quality control whose name derives from the Japanese word meaning improvement. Previous studies of Kaizen training programs evaluate training impacts on management practices, business performance, and the willingness to pay for training, and do not pay attention to impacts on workers. Using firm-level data, this study attempts to assess the impacts of an onsite training program held at small and medium enterprises in eight Central American and Caribbean countries. Treated firms are compared with those firms that are selected by the sponsor organization according to the same criteria as the treated counterparts but not yet treated. Propensity score matching is employed to increase comparability between the two groups. The paper presents suggestive evidence that the training program improved work practices and the attitude of workers toward work. It also suggests that the treated firms weaken the linkage between sales revenues and wages probably in an effort to induce workers to pay attention to activities that do not immediately increase sales, such as preventive maintenance and coaching other workers.
... Nevertheless, several 'framework conditions' 4 for the development of an effective IS in Ethiopia, appropriate to local needs, appear to be increasingly in place, particularly with regard to the growth of research capabilities focused on adaptation and learning. Examples include the strengthening of the Technical and Vocational Education System (Altenburg, 2010) and the Industrial Policy Dialogue for Mutual Learning and the Pilot Project for Productivity and Quality Improvement (Kaizen) (see Shimada, 2015 for an excellent review of these programmes). Indeed, this could be aligned to the green growth agenda through an innovation policy highlighting environmental development and protection as one of its eleven critical areas. ...
The concept of ‘sustainable industrialisation’ is now integral to the UN's Sustainable Development Goals. However, there are no historical examples or current models to emulate. Scholarly analyses of putative initiatives to green industrialisation, especially in developing countries, are few and limited. This article explores the conception and implementation of green industrialisation in Ethiopia, one of the world's poorest nations, where an ambitious Climate Resilient Green Economy (CRGE) strategy has been created, alongside a multi-sectoral Growth and Transformation Plan (GTP), to leapfrog environmentally unsustainable development and bring the country to middle-income status by 2025. Using the socio-technical transition (STT) perspective and in particular Smith, Stirling, and Berkhout (2005) framework for assessing sustainable transition programmes, it analyzes the ‘selection pressures’ on the industrial ‘regime’ and its ‘adaptive capacity’. It finds: (i) clear articulation of the imperative for climate change mitigation and economic growth; (ii) strong high-level government commitment to a greening agenda within the context of accelerated industrialisation; and (iii) a nascent innovation system that is beginning to evolve according to these priorities. However, the analysis also identifies important challenges, including: coordination mechanisms between different stakeholders; framing issues; availability of resources; and ongoing tension between addressing climate change and promoting economic growth. It also highlights the importance of the availability of cross-border resources for purposive sustainability transition within low-income countries.
... Then, as the population grew, the opportunities for small businesses such as retail shops and restaurants increased. This dynamic process of development will have a significant economic impact through multiplier effects [46,44]. ...
After a huge natural disaster, what are the factors that make recovery of the society possible? This paper examines how social capital has worked in the process of recovery and reconstruction in Kobe, Japan, since the Great Hanshin Awaji Earthquake in 1995. After ten years, the population of Kobe returned to its pre-earthquake level. It looks as though the city has recovered well. However, if we look closer, ward by ward data gives a different picture. Even if each ward suffered a similar level of damage, some have recovered faster than others. For this reason, this paper looks further into the factors that caused this difference. To analyze these factors, this paper focuses on the tertiary sector within Kobe because there has been a structural shift away from the secondary sector due to the damage caused by the earthquake. Additionally, the tertiary sector accounted for 80% of employment, the most important factor for reconstruction over the mid- and long-term. The paper uses panel data from 1995 to 2010, and employs social capital proxies, such as households where three generations live together and crime rates, to examine the factors of recovery. The empirical analysis found that social capital is the factor that generates more jobs in the tertiary sector, thus, the factor that created the differences in the pattern of recovery among wards. The findings indicate the ways a recovery can be made faster after future natural disasters so as to create resilient societies.
... In many cases after disasters, it was observed that tight bonds between relatives and neighbors led to collective action on the part of the community and the efficient allocation of the necessary resources, catalyzing communication to access assistance. A growing number of studies in economics and sociology have discussed the effect of social capital (Shimada forthcoming;Putnam 2000;Putnam et al. 1993;Knack and Keefer 1997;Narayan and Pritchett 1997;Sato 2001; Cabinet Office of the Government of Japan 2003, 2005). ...
... Recently, several studies found that some kinds of interventions can enhance social capital [27,37,47,56,59,6,64,77]. For instance, Aoyagi Keitaro et al. [6] investigated the impact of physical infrastructure on social capital accumulation using the data set from an irrigation project in Sri Lanka. ...
After the recent Great East Japan Earthquake of March 11, 2011, the importance of social capital has been heavily stressed. While there is a growing collection of literature on the role of social capital after disasters, other studies have mostly used qualitative analysis or quantitative methods using cross-sectional data from one point in time. This paper studied Time-Series-Cross-Section (TSCS) data from all 47 Japanese prefectures spanning about 30 years from 1981 to 2012. There are very few studies useing TSCS because available data is scarce. This paper employs proxies for social capital. The study found quantitatively that social capital plays important roles in the process of recovery, encouraging people to return to their homes and to stay. What happened to Tohoku as a result of the earthquake, tsunami, and nuclear power accident was the destruction of social capital on a huge scale. The population is still decreasing in the area. Social capital should be at the core of future planning to rebuild Tohoku.
This chapter aims to provide insights into effective approaches for creating a learning society for quality growth. Bearing in mind that the outstanding cases of transformation from the previous chapter were accompanied by a learning process and enabled by learning capacity, in this chapter, I discuss effective approaches to initiate and maintain momentum and to scale up the learning process, building on cases of international cooperation for capacity development. These cases are analyzed from a “learning perspective.”
This chapter aims to measure the impact of Kaizen, known as Toyota Production System to automotive suppliers in South Africa. In total thirty-one people from target suppliers participated in semi-structured interviews. The findings indicate Kaizen enhanced the competitiveness of suppliers through an improvement in quality and productivity. The findings also indicate the impact of Kaizen differed among the suppliers. The contributory factors of Kaizen implementation are management commitment, resource allocation, and continuous training. The findings suggest that Kaizen had a positive impact on employees when learning is emphasized. These results contribute to understanding how to promote successful implementation of Kaizen.
This studyexamines Japan’s experience as a recipientofthe United States’ aid forproductivity improvementafterWorld War II. Three pointswere identified as a result of the research. First,theUS assistance was extremely strategic and large-scale. The goalof the US aid was to exclude the Soviet influence over Japan’s labor unions because the labor unions were considered sympathetic to theSoviet Unionduringthe cold war. The aid was implemented on an extremely large scale,including the acceptance of3,986 Japanese trainees into the US over sevenyears. Second, prior tothe aid, labor-management relations in Japan were adversarial, but whileJapanwas acceptingaidfrom the US, leaders of opposition labor unions were also invited to visit the United States. The aid gradually changed labor-management relations from conflictive to constructive. In other words, while working on improving productivity, collaborative labor-management relations weredeveloped in Japan,which suggests that Kaizencan be implemented in other countries. Third, it was the private sector thatplayed a central role in receiving aid from the US,not the Japanese government. Instead, the government provided supplemental supportforthe active movement of the private sector, very likely anideal industrial policy. It is also worth noting that while half the budget (132 million yen in half a year) wasborne by Japan in accepting the aid, the majority of the budget was borne by the private sector. In other words, the commitment of the private sector was very high. Keywords:Management training, Kaizen, Industrial PolicyJEL Classification: L2, M1, O1
国際開発研究 Vol. 27(2)
Journal of International Development Studies. Vol. 27(2)
Published article is accessible from the following HP.
https://www.jasid.org/uploads/ckfinder/files/JASID-27-2.pdf
国際開発研究 Vol. 27 (2)
Journal of International Development Studies. Vol. 27 (2)
Published article is available from the following HP for free.
https://www.jasid.org/uploads/ckfinder/files/JASID-27-2.pdf
本ペーパーは1960 年代のアジアへ の展開をはじめる時期までの援助の歴史を振り返ったものである。この時期は終戦から、援助を日本が受けていた被援助国の時代を経て、日本が援助をアジアに展開していった時代である。本ペーパーが目的とするところは、 日本が被援助国であったときにどのようにアメリカの生産性向上支援を受容していたかを検証し、被援助国 としての経験がどのようなものであったかを導き出すことである。
その経験の特質は、第１に、アメリカの生産性向上・対日援助は東西冷戦の中で極めて戦略的な位置づ けの中で行われたものであったことであり、7 年間で 3,986 名の研修員を受け入れるなど極めておおきな規 模で実施されていた点である。第２に、日本において労使関係はもともと対立的であったが、援助を受け入 れていく中で協調的な労使関係に変化していったことである。つまり、協調的な労使関係は生産性向上に取り組む中でむしろ作り上げられてきたのである。そして、第３に、アメリカ・対日援助の受け入れに当たって、日本では政府ではなく民間セクター（とくに経済同友会）が援助の受け入れに中心的な役割を果たした ことである。むしろ政府は活発な民間の動きを補助的に支える役割を担ったのであり、これは理想的な産業 政策のあり方であったと言える。援助受け入れに当たって予算の半分（半年で 1 億 800 万円-1 億 3200 万 円）は日本が負担し、しかも政府ではなく大部分を民間が負担したのである。つまり、民間のコミットメントが高かったと言える。アメリカの援助規模はおおきかったにもかかわらず、現在の日本国内では生産性向上 について被援助国であったという認識はあまり持たれていない。それだけ日本においては生産性向上を政府、企業、労働者ともそれぞれが自らのものとして受容していったためと考えられる。 キーワード カイゼン、生産性、対日援助、民間セクター開発、産業政策
本研究はアメリカによる生産性向上の対日援助に焦点をあて、戦後直後から19６0年代のODA黎明期までを振り返ったものである。この時代は終戦後から、援助を日本が受けていた被援助国の時代と、援助国に転換していく時代である。本研究が目的とするところは、日本が被援助国であった時にどのようにアメリカの生産性向上支援を受容していたかを検証し、現在の日本のカイゼン支援と比較し、どのような特質があるのかを導き出すことである。
その特質は、第１に、米国・対日援助の受け入れにあたって、日本では政府ではなく民間セクター（特に経済同友会）が援助の受け入れに中心的な役割を果たしたことである。むしろ政府は活発な民間の動きを補助的に支える役割を担ったのであり、これは理想的な産業政策の在り方であったと言える。援助受け入れに当たって予算の半分（半年で１億800-3200万円）は日本が負担し、しかも政府ではなく大部分を民間が負担したのである。つまり、民間のコミットメントが高かったと言える。
第2に、アメリカの労働組合政策は日本の非軍事化・経済民主化の中で労働組合結成の奨励に始まり、東西冷戦の中で労働組合の西側陣営への取り込みへと代わり生産性向上プログラムの支援が行われるという戦略的な位置づけを持ったものであった。そうした中でこの援助が７年間で3,986名の研修員を受け入れるなど極めて大きな規模で実施されていた点である。
そして、第3に、労使関係はもともと対立的であったが、援助を受け入れていく中で協調的な労使関係に変化していったことである。つまり、協調的な労使関係は日本においても生産性向上に取り組む中でむしろ作り上げてきたのである。ということは他国においても同様の取り組みは可能であるということを意味している。アメリカの援助規模は大きかったにもかかわらず、現在の日本では生産性向上について被援助国であったという認識はあまり国内では持たれていない。それだけ日本が生産性向上を自らのものとして受容していったためと考えられる。
キーワード: カイゼン、生産性、対日援助、民間セクター開発、産業政策
This paper aims to illustrate the importance of disaggregating learning. In Africa, knowledge related to policy formulation, policy implementation, and managerial skills has been neglected. This paper focuses on a project supporting productivity and quality enhancement using kaizen in Ethiopia. The pilot project covered twenty-eight firms in five sectors and showed a remarkable impact in as short a time as six months. During this time, the average benefit for a firm was around 500,000 Ethiopian Birr (30,000 US Dollars) without any additional investment. This was equivalent to almost 75 US Dollars per employee, roughly equal to the average monthly wage of an Ethiopian worker. This paper argues that “managerial” and “policy” learning are important and deserve far more attention than they tend to receive.
There has been renewed interest in productivity movement, especially the diffusion of Kaizen management, as an approach to industrial development in developing countries in recent years. While some previous studies evaluate the impact of the introduction of Kaizen on management practices and business performance, few studies have been conducted to assess its impacts on working conditions, wages, and employment, especially in the long-term. We collected firm-level data in eight countries in Central America to conduct a retrospective study of the impacts of the Kaizen project implemented in eight countries in the Central America and Caribbean Region by the Japan International Cooperation Agency. The project selected 94 firms to treat based on willingness to adopt Kaizen management. Using the same criteria, we selected 182 comparable firms in the same industries in the same countries as those treatment group firms. Employing propensity score matching methods, this study finds that the introduction of Kaizen improved working conditions and strengthened the social capital of workers in those firms. Managers’ willingness to pay for the Kaizen training became higher after the training, suggesting positive effects for the firms’ performances. We also find that managers and workers perceive the usefulness of Kaizen differently, which offers suggestions for how to improve the design of future training programs.
What should be the nature of industrial policy in the new era of striving for "quality growth"? This volume is a collection of the results of the research project "New Perspectives to Industrial Development" conducted jointly between the JICA Research Institute and the Initiative for Policy Dialogue (IPD).
The IPD at Columbia University is led by Joseph E. Stiglitz, a professor of Columbia University and a Nobel Prize winner in Economic Sciences. The theme of this joint research was the role of industrial policy in the world’s sustainable development. Industrial policy involves governmental intervention in the market, and has been the subject of policy debates for decades. In recent years, there has been a renewed recognition that the industrial policies implemented by each nation around the world have played a crucial role in the economic growth of those nations since the Industrial Revolution in England. This has garnered increasing attention.
The contents of this volume are presented in three parts, “Part 1: Theoretical and Conceptual Foundations," "Part 2: Development Finance," and "Part 3: Practice and Proposals." In regard to development finance in particular, there are many lessons regarding development finance in developing countries gleaned from case studies of development banks in Japan, India, Europe, and other regions. "A New Structural Economics Perspective" is also advocated.
This volume was edited by Stiglitz and Akbar Noman, a senior fellow at IPD. Contributors include Justin Yifu Lin (former Chief Economist of the World Bank), José Antonio Ocampo (Columbia University; former Under-Secretary-General of the United Nations), João Carlos Ferraz (former Chief Economist of the Brazilian Development Bank), and Carlota Perez (The London School of Economics and Political Science, London University).
The JICA Research Institute is represented in Part 2 (Development Finance) by Visiting Scholar Go Shimada with the article "Inside the Black Box of Japan's Institution for Industrial Policy: An Institutional Analysis of the Development Bank, Private Sector, and Labor" and in Part 3 (Practice and Proposals) by Senior Research Advisor Akio Hosono with the article "Industrial Strategies: Toward a Learning Society for Quality Growth."
This is the first in an occasional series of DPR Debates, designed to illuminate specific issues of international development policy. Each debate will bring together two well-known researchers or practitioners, giving them the opportunity, over three rounds, to test and challenge each other's ideas. The debates are intended to be robust but accessible, rooted in rigorous research but useful to the wide readership of Development Policy Review.
Most academic and development policy discussions about microentrepreneurs focus on credit constraints and assume that subject to those constraints, the entrepreneurs manage their business optimally. Yet the self-employed poor rarely have any formal training in business skills. A growing number of microfinance organizations are attempting to build the human capital of microentrepreneurs in order to improve the livelihood of their clients and help further their mission of poverty alleviation. Using a randomized control trial, we measure the marginal impact of adding business training to a Peruvian group lending program for female microentrepreneurs. Treatment groups received thirty- to sixty-minute entrepreneurship training sessions during their normal weekly or monthly banking meeting over a period of one to two years. Control groups remained as they were before, meeting at the same frequency but solely for making loan and savings payments. We find little or no evidence of changes in key outcomes such as business revenue, profits, or employment. We nevertheless observed business knowledge improvements and increased client retention rates for the microfinance institution. (c)© 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
What capital is missing in developing countries? We put forward “managerial capital,”
which is distinct from human capital, as a key missing form of capital in developing countries. And it has also been curiously missing in the research on growth and development. We argue in this paper that lack of managerial capital has
broad implications for firm growth as well as for the effectiveness of other input factors. A large literature in development economics aims to understand the impediments to firm growth, particularly in small and medium enterprises. Standard growth theories have explored the importance of input factors such as capital and labor in the production function of firms and countries. At the micro level, empirical studies
such as Suresh de Mel, David McKenzie and Christopher Woodruff (2008), Abhijit Banerjee
et al. (2009), and Dean Karlan and Jonathan Zinman (2009) have estimated the impact of
access to finance for capital constrained microenterprises (see Karlan and Jonathan Morduch, 2009, for a review). At the macro level, papers by Robert King and Ross Levine (1993), Raghuram Rajan and Luigi Zingales (1998), and Marianne Bertrand, Antoinette Schoar, and David Thesmar (2007) suggest the importance of the financial system for economic growth.
As strategies for achieving sustainable growth in developing countries are re-examined in light of the financial crisis, it is critical to take into account structural change and its corollary, industrial upgrading. Economic literature has devoted a great deal of attention to the analysis of technological innovation, but not enough to these equally important issues. The new structural economics outlined in this paper suggests a framework to complement previous approaches in the search for sustainable growth strategies. It takes the following into consideration: First, an economy's structure of factor endowments evolves from one stage of development to another. Therefore, the optimal industrial structure of a given economy will be different at different stages of development. Each industrial structure requires corresponding infrastructure (both"hard"and"soft") to facilitate its operations and transactions. Second, each stage of economic development is a point along the continuum from a low-income agrarian economy to a high-income industrialized economy, not a dichotomy of two economic development stages ("poor"versus"rich"or"developing"versus"industrialized"). Industrial upgrading and infrastructure improvement targets in developing countries should not necessarily draw from those that exist in high-income countries. Third, at each given stage of development, the market is the basic mechanism for effective resource allocation. However, economic development as a dynamic process requires industrial upgrading and corresponding improvements in"hard"and"soft"infrastructure at each stage. Such upgrading entails large externalities to firms'transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating industrial upgrading and infrastructure improvements.
An analysis of data on a sample of small-scale manufacturers shows that a business is less likely to survive and grows slower the smaller the average price-cost margin in the industry in which it operates. The probability of survival is also smaller in import competing industries. So is the mean growth rate among survivors. We interpret this as evidence that small businesses are less likely to survive and grow slower in industries where the pressure of competition is stronger. Given competitive pressure and establishment characteristics, the probability of business survival and the expected growth rate conditional on survival both increase with entrepreneurial human capital. This is in the sense that the probability of business survival increases with the number of years of schooling and the number of years of business experience of the entrepreneur as does the expected growth rate conditional on survival. These results are consistent with another finding that unobservable influences on business hazard are correlated with those on growth. As a result, the effect of competition and entrepreneurial human capital on the growth of survivors would be biased for the effect of the same variables on the expected growth rate of a startup.
We use randomized grants to generate shocks to capital stock for a set of Sri Lankan microenterprises. We find the average
real return to capital in these enterprises is 4.6%–5.3% per year), substantially higher than market interest rates. We then
examine the heterogeneity of treatment effects. Returns are found to vary with entrepreneurial ability and with household
wealth, but not to vary with measures of risk aversion or uncertainty. Treatment impacts are also significantly larger for
enterprises owned by males; indeed, we find no positive return in enterprises owned by females.
What are the underlying rationales for industrial policy? Does empirical evidence support the use of industrial policy for correcting market failures that plague the process of industrialization? This article addresses these questions through a critical survey of the analytical literature on industrial policy. It also reviews some recent industry successes and argues that public interventions have played only a limited role. Moreover, the recent ascendance and dominance of international production networks in the sectors in which developing countries once had considerable success implies a further limitation on the potential role of industrial policies as traditionally understood. Overall, there appears to be little empirical support for an activist government policy even though market failures exist that can, in principle, justify the use of industrial policy. Copyright 2006, Oxford University Press.
Growth theory has traditionally assumed the existence of an aggregate production function, whose existence and properties are closely tied to the assumption of optimal resource allocation within each economy. We show extensive evidence, culled from the micro-development literature, demonstrating that the assumption of optimal resource allocation fails radically. The key fact is the enormous heterogeneity of rates of return to the same factor within a single economy, a heterogeneity that dwarfs the cross-country heterogeneity in the economy-wide average return. Prima facie, we argue, this evidence poses problems for old and new growth theories alike. We then review the literature on various causes of this misallocation. We go on to calibrate a simple model which explicitly introduces the possibility of misallocation into an otherwise standard growth model. We show that, in order to match the data, it is enough to have misallocated factors: there also needs to be important fixed costs in production. We conclude by outlining the contour of a possible non-aggregate growth theory, and review the existing attempts to take such a model to the data.
This book examines how to promote industrial development in low-income countries. It considers the role of traders in the evolution of a cluster, the role of managerial human capital, the effect of the 'China shock', and the role of industrial policies focused on international knowledge transfer in supporting the upgrading of clusters. © Tetsushi Sonobe and Keijiro Otsuka 2011. All rights reserved.
Small and medium size enterprises (SMEs) have been the target of renewed interest in discussions on economic growth in recent years. In the 1960s and 1970s economists thought of SMEs as a backward sector employing unskilled labour. These views and attitudes toward SMEs changed in the 1980s. Economists, realizing the important role of SMEs as suppliers of parts and components to final assemblers and recognizing the creativity and flexibility of SMEs, began to look at SMEs as a sector that plays an important and constructive role in promoting economic growth. Indeed, upgrading the technological capabilities of SMEs is considered crucial for the development of competitive industries and economy.
In the 1990s, development policy advocated by international financial institutions was influenced by the so-called Washington Consensus thinking. This strategy, based largely on liberalization, privatization, and price-flexibility, downplayed, if not disregarded, the role of government in steering the processes of technological learning and economic growth. With the exception of the Far East, many developing countries adopted the view that industrial policy resulted in inefficiency and poor economic growth. However, industrial policies have been successfully employed in the past in the countries that are now developed industrial leaders, including the USA, Germany, and Japan, and more recently by in what are now some of the most vibrant emerging markets. India, China, Brazil, and many NIE Asian countries nurtured technology intensive industries to jumpstart their production and (later) exports. They have had remarkable success not only in boosting economic growth, but also in diffusing the benefits of technological learning to the rest of the economy. The book analyzes the impact of an ensemble of industrial policies, including those affecting the accumulation of technological knowledge, institutions supporting scientific and technological learning, the profitability of different lines of business, the protection of "infant industries", competition and intellectual property rights, and trade policies. Ample historical evidence, which the book explores, shows that industrial policies do work when appropriate combinations of measures are adopted. Well beyond a "market failure" perspective - whereby "perfect" markets are the purest benchmarks - institutions and policies embed both learning and non-learning behaviors, the construction of domestic learning organizations, national systems of production, imitation, and innovation. Together, the book discusses the opportunities and constraints facing the implementation of industrial policies associated with the current regime of international economic relations (WTO, TRIPs).
The political and economic renaissance of Africa is an issue that continues to preoccupy Africans and non-Africans alike. Various methods of achieving such a renaissance have been proposed. Most of these proposals are variations of the dominant neoliberal paradigm of development. The argument of this chapter is that the neoliberal paradigm is a dead end, and that a fundamental shift in paradigm is required to bring about the African renaissance. African states need to move away from that paradigm and towards becoming developmental in the sense and manner sketched here.
This chapter lays out the premise for the rest of the volume which addresses the central question of what needs to be done to sustain and accelerate the recent improvement in the economic performance of Sub-Saharan Africa. This revival remains too dependent on booming commodity prices whilst sustained, poverty-reducing growth requires structural transformation. The type of learning, industrial, and technology policies recommended here are informed by the lessons of success, especially in East Asia. Such policies are needed not only for industrialization but also agriculture. Both the constraints of geography and governance and their policy implications have been misunderstood in the dominant discourse and can be overcome by a transformation of the mainstream reform agenda. Reforms of the state and governance should move away from what has emerged as the "good governance" recipe and towards "growth-enhancing governance" aimed at facilitating an appropriate balance between the state and the market.
A skilled workforce is essential for Sub-Saharan Africa's economic transformation. However, because investing in skills is costly and often exceeds the capacity of governments to finance to the extent and quality required, a vicious cycle persists in which high costs constrain investments in skills which in turn impedes economic growth and limits the resources available for investing in skills. Breaking out of this chicken-and-egg problem calls for a two-pronged approach that benefits from visionary and pragmatic leadership. The first prong integrates skills development into economic development plans and relies on purposeful and flexible arrangements to meet employers' immediate demand for skills, particularly in the prospective growth sectors. The second prong involves the longer-run task of systemwide improvement, to equip everyone with strong literacy and numeracy skills, to increase the education system's orientation toward science and technology, and to foster strong linkages with the world of work, particularly in tertiary education.
The international recession of the early 1980s left many less developed countries in a precarious position as their exports collapsed, private capital flows were sharply reduced and interest rates rose. Major aid donors, in particular the World Bank responded with fundamental changes in aid policy - the introduction of "structural adjustment lending'. This book examines the implications of this change for both the World Bank and the recipients of aid. The so-called "counter-revolution' in development policy has found, in spite of the Bank's wishes, limited application in developing countries. This volume carries the analysis and policy recommendations. It examines the origins of policy-based lending and analyses the essential features of the bargaining process which is at its heart. -from Authors
The purpose of this paper is to present a “Keynesian” model of economic growth which is an amended version of previous attempts put forward by one of the authors in three former publications.1 This new theory differs from earlier theories mainly in the following respects:
(1)
it gives more explicit recognition to the fact that technical progress is infused into the economic system through the creation of new equipment, which depends on current (gross) investment expenditure. Hence the “technical progress function” has been re-defined so as to exhibit a relationship between the rate of change of gross (fixed) investment per operative and the rate of increase in labour productivity on newly installed equipment;
(2)
it takes explicit account of obsolescence, caused by the fact that the profitability of plant and equipment of any particular “ vintage ” must continually diminish in time owing to the competition of equipment of superior efficiency installed at subsequent dates; and it assumes that this continuing obsolescence is broadly foreseen by entrepreneurs who take it into account in framing their investment decision. The model also assumes that, irrespective of whether plant and equipment has a finite physical life-time or not, its operative life-time is determined by a complex of economic factors which govern the rate of obsolescence, and not by physical wear and tear;
(3)
in accordance with this, the behavioural assumptions concerning the investors’ attitudes to uncertainty in connection with investment decisions and which arc set out below, differ in important respects from those made in the earlier models;
(4)
account is also taken, in the present model, of the fact that some proportion of the existing stock of equipment disappears each year through physical causes—accidents, fire, explosions, etc.—and this gives rise to some “ radioactive ” physical depreciation in addition to obsolescence;
(5)
since, under continuous technical progress and obsolescence, there is no way of measuring the “ stock of capital ” (measurement in terms of the historical cost of the surviving capital equipment is irrelevant; in terms of historical cost less accrued “ obsolescence ” is question-begging, since the allowance for obsolescence, unlike the charge for physical wear and tear etc., depends on the share of profits, the rate of growth, etc., and cannot therefore be determined independently of all other relations), the model avoids the notion of a quantity of capital, and its corollary, the rate of capital accumulation, as variables of the system; it operates solely with the value of current gross investment (gross (fixed) capital expenditure per unit of time) and its rate of change in time. The macro-economic notions of income, income per head, etc., on the the other hand are retained.
The theoretical case for industrial policy is a strong one. The market-failures which industrial policies target—in markets for credit, labor, products, and knowledge—have long been at the core of what development economists study. The conventional case against industrial policy rests on practical difficulties with its implementation. Even though the issues could in principle be settled by empirical evidence, the evidence to date remains uninformative. Moreover, the conceptual difficulties involved in statistical inference in this area are so great that it is hard to see how statistical evidence could ever yield a convincing verdict. A review of industrial policy in three non-Asian settings--El Salvador, Uruguay, and South Africa--highlights the extensive amount of industrial policy that is already being carried out and frames the need for industrial policy in the specific circumstances of individual countries. The traditional informational and bureaucratic constraints on the exercise of industrial policy are not givens; they can be molded and rendered less binding through appropriate institutional design. Three key design attributes that industrial policy must possess are embeddedness, carrots-and-sticks, and accountability. * This is a paper prepared for the Commission on Growth and Development. I thank Michael Spence for suggestions and guidance, Roberto Zagha for inspiration and detailed comments, and Ricardo Hausmann and Chuck Sabel for many lengthy conversations that substantially influenced my thinking on these matters.
Ever since development economics became a field, there has been a search for “the” key to development. Physical capital accumulation, human capital, industrial development, institutional quality, social capital, and a variety of other factors have been the focus at one time or another. As each became the focal point, there was a parallel explicit or implied role of government. If I understand Justin Lin correctly, he is saying that the “new structural economics” (NSE) accepts that earlier thought ignored comparative advantage, which should be market determined, but that growth requires improvements in ‘hard’ (tangible) and ‘soft’ (intangible) infrastructure at each stage. Such upgrading and improvements require coordination and inhere with large externalities to firms' transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating structural change (p. 206). He seems also to believe that growth depends almo...
Demonstrates that technical change is attributable to experience. The cumulative production of capital goods is used as the index of experience. New capital goods are assumed to completely embody technical change. The assumption is made that the model will be operating in an environment of full employment although reference is made throughout to the case of capital shortage. The implications of this model on wage earners are discussed, and profits and investments are examined. The rate of return is determined by the expected rate of increase in wages, current labor costs per unit output, and the physical lifetime of the investment. Learning is an act of investment that benefits future investors. Further analysis shows that the socially optimal ratio of gross investment to output is higher than the competitive level. (SRD)
We test whether managerial human capital has a first order effect on the performance and growth of small enterprises in emerging markets. In a randomized control trial in Puebla, Mexico, we randomly assigned 150 out of 432 small and medium size enterprises to receive subsidized consulting services, while the remaining 267 enterprises served as a control group that did not receive any subsidized training. Treatment enterprises were matched with one of nine local consulting firms and met with their consultants once a week for four hours over a one year period. Results from a follow-up survey, conducted after the intervention, show that the consulting services had a large impact on the performance of the enterprises in the treatment group: monthly sales went up by about 80 percent; similarly, profits and productivity increased by 120 percent compared to the control group. We also see a significant increase in the entrepreneurial spirit index for the treatment group, a set of questions designed to illicit the SME owners’ confidence in their ability to manage their business and deal with any future difficulties. However, we do not find any significant increase in the number of workers employed in the treatment group.
This study focuses on the role of entrepreneurs in the private sector in sub-Saharan Africa. Using data from the Regional Program on Enterprise Development (RPED) and controlling for various factors, our analysis compares growth rates of indigenously owned African firms with firms owned by entrepreneurs of Asian or European descent, in Kenya, Zambia, Zimbabwe, and Tanzania. We find that after controlling for firm size and age, various entrepreneurial characteristics, and sector and country differences, minority (or non-indigenous) entrepreneur firms start out larger and grow significantly faster than indigenously-owned African firms. Our results are consistent with theories that argue that informational and financial networks created by minority entrepreneurs provide access to credit, information, and technology for members of these networks. We also find that within indigenously-owned African firms, entrepreneurs with secondary and/or university education realise a higher rate of growth; access to education presumably enables indigenous African entrepreneurs to develop managerial skills that serve as a substitute for the informational and financial networks created by minority entrepreneurs.
Summary Business training is a widely used development tool, yet little is known about its impact. We study the effects of such a business training program held in Central America. To deal with endogenous selection into the training program, we use a regression discontinuity design, exploiting the fact that a fixed number of applicants are taken into the training program based on a pre-training score. Business training significantly increases the probability that an applicant to the workshop starts a business or expands an existing business. Results also suggest gender heterogeneity as well as the presence of financial constraints.
There are two complementary ways to introduce the analysis of the institutions and policy shaping industrial development. First, one may just build on the simple empirical observation that no example can be found in history of a process of development nested in an environment even vaguely resembling the institution- free tale of economic interactions that one finds in a good deal of contemporary economic theory. On the contrary, all historical experiences of sustained economic growth – starting at least from the English “Industrial Revolution” – find their enabling conditions in a rich set of complementary institutions, shared behavioral norms and public policies. Indeed, the paramount importance of institutions and social norms appears to be a rather universal property of every form of collective organization we are aware of. Moreover, much more narrowly, discretionary public policies have been major ingredients of national development strategies, especially in catching-up countries, throughout the history of modern capitalism: cf. the contributions by Mazzoleni and Nelson (2005), and Perez and Di Maio (2006) to this project, together with the historical experiences analyzed in the different country chapters. Conversely, from a symmetric perspective, there are extremely sound theoretical reasons supporting the notion that institutions and policies always matter in all processes of technological learning and economic coordination and change. Here we focus on the latter issue and outline some theoretical foundations for institution-building and policies.
Growth theory has traditionally assumed the existence of an aggregate production function, whose existence and properties are closely tied to the assumption of optimal resource allocation within each economy. We show extensive evidence, culled from the micro-development literature, demonstrating that the assumption of optimal resource allocation fails radically. The key fact is the enormous heterogeneity of rates of return to the same factor within a single economy, a heterogeneity that dwarfs the cross-country heterogeneity in the economy-wide average return. Prima facie, we argue, this evidence poses problems for old and new growth theories alike. We then review the literature on various causes of this misallocation. We go on to calibrate a simple model which explicitly introduces the possibility of misallocation into an otherwise standard growth model. We show that, in order to match the data, it is enough to have misallocated factors: there also needs to be important fixed costs in production. We conclude by outlining the contour of a possible non-aggregate growth theory, and review the existing attempts to take such a model to the data.
The number of people engaged in micro and small enterprises increases as a result of new enterprises being started and through an expansion of existing activities. As a partial offset to these increases, employment declines when existing businesses cease operations. This article draws on recent survey work to examine the magnitude and determinants of enterprise births, closures and expansions. It explores the ways in which these different sources of change are influenced by the state of the macroeconomy, and examines policy and project implications.
As policy-makers and members of the donor community have recognized the importance of micro and small enterprises in developing countries, the paucity of information regarding the ways in which MSEs grow and change over time has become glaring. This study examines one issue of small-firm dynamics, namely growth, using new data collected in five southern African countries. The level of human capital embodied in the proprietor, firm location, sector, and proprietor gender are found to be important determinants of growth. The results also indicate an inverse relationship between firm growth and both firm age and firm size.
Economists have long puzzled over the astounding differences in productivity between firms and countries. In this paper, we present evidence on a possible explanation for persistent differences in productivity at the firm and the national level -- namely, that such differences largely reflect variations in management practices. We have, over the last decade, undertaken a large survey research program to systematically measure management practices across firms, industries, and countries. Our survey approach focuses on aspects of management like systematic performance monitoring, setting appropriate targets, and providing incentives for good performance. We explain how we measure management; identify some basic patterns in our data; then turn to the question of why management practices vary so much across firms and nations. What we find is a combination of imperfectly competitive markets, family ownership of firms, regulations restricting management practices, and informational barriers allow bad management to persist.
Incl. bibl., index. We also have Vol. 2: Aid and power: the World Bank and policy-basic lending. Case studies
Incl. bibliographical references, index
En esta obra se usa cluster industrial como una concentración geográfica o localización de empresas que producen mercancías similares ó relacionadas en un área pequeña. El estudio se localizan en Asia del este particularmente en China, Japón y Taiwán mismos que marcan un desarrollo en esta región muy particular, se estudian casos específicos y de manera especial el desarrollo de la industria de las motocicletas en Japón y en China.
This paper proposes a new theory of the size distributions of business firms. It postulates an underlying distribution of persons by managerial "talent" and then studies the division of persons into managers and employees and the allocation of productive factors across managers. The implications of the theory for secular changes in average firm size are developed and tested on U.S. time series.
The distributions of firm size, span of control, and managerial incomes are modeled as the joint outcome of market assignments of personnel to hierarchical positions. Assigning persons of superior talent to top positions increases productivity by more than the increments of their abilities because greater talent filters through the entire firm by a recursive chain of command technology. These multiplicative effects support enormous rewards for top level management in large organizations. Also, superior managers control more than proportionately larger firms. Consequently, the distributions of reward and firm size are skewed relative to the distribution of abilities.
Summary Data from the World Bank Enterprise Surveys show that indirect costs (related to infrastructure and services) account for a relatively high share of firms' costs in poor African countries and pose a competitive burden on African firms. We estimate firm-level revenue and value-added functions for six industries in 17 developing countries, demonstrating that firm performance is sensitive to the cost of indirect inputs. As indirect inputs are not usually included in estimations of value added, we argue that existing estimates understate the relative performance of African manufacturing firms.
This paper addresses the nature of competition in an industry in which firms experience learning-by-doing. It identifies conditions under which competition leads to an emergence of monopoly and conditi ons under which competition persists. Certain distinguished industria l and trade policies are then studied. The per-se doctrine is examined. Conditions are located in which the infant industry is valid. By way of contrast, it is argued that, if foreign learning is likely to be vastly superior, there may be a case for import subsidies. Copyright 1988 by Royal Economic Society.
Conventional wisdom has it that trade en- hances economic efficiency and thus promotes growth. At least since Robert M. Solow's (1957) pioneering work, however, technologi- cal progress has been recognized as the domi- nant factor in determining the rate of growth. This is presumably even more true for develop- ing countries, for which the possibilities of clos- ing the knowledge gap with advanced industrial countries offers especially large growth poten- tial. We examine the impact of trade restrictions in economies in which technological spillovers within countries and across industries are fun- damental to the process of growth (see Kenneth J. Arrow, 1962a, 1962b; Paul M. Romer, 1986; Stiglitz, 1987). Since that work, it has been clear that markets, by themselves, do not nec- essarily, or in general, lead to overall dynamic efficiency; and that there are often trade-offs between static inefficiencies (e.g., associated with patent protection) and long-term growth. We find, here in particular, that the dynamic benefits of broad trade restrictions may out- weigh their static costs. Our analysis provides the basis of an infant economy (as opposed to an infant industry) argument for protection. This paper develops a simple two-sector model with an industrial (modern) and a tradi- tional (craft or agricultural) sector. There are four key features to the model: (a) there are spillovers from the industrial sector to the craft sector, for which firms in the industrial sector are not compensated; (b) such spillovers are geographically based, that is, it is only produc- tivity increases in the industrial sector in the developing countries that affect productivity in- creases in the traditional sector; (c) innovations are concentrated in the industrial sector; and (d) size is among the important determinants of the pace of innovation in the industrial sector. Earlier critiques of trade policies encouraging the development of the industrial sector in de- veloping countries ignored these spillovers. They argued, in effect, that Korea would always have a comparative advantage in growing rice; therefore, it was foolish for it to try to restrict imports of industrial goods, even if by so doing productivity in the industrial goods sector was increased. It could never catch up, so the pro- tection would have to be permanent. Year after year, the country would have been better off if it simply specialized in its own comparative advantage, growing rice. Korea could, and did, catch up, however, at least in certain areas. If catch-up is possible, then dynamic comparative advantage differs from static comparative ad- vantage. But even if Korea's comparative ad- vantage remained in agriculture, industrial protection might be desirable, because by sup- porting it, one might have a more dynamic agricultural (traditional) sector. Trade restric- tions enhance the size of the industrial sector; the benefits spill over to the rural sector; and national income grows at a possibly far faster pace. After presenting the model, we explain why the underlying hypotheses are plausible and argue that the model is broadly consistent with historical experience and empirical evidence.
This paper explores the causes and consequences of the more important market failures which impede the development of LOCs, and explains why the non-market institutions which often ameliorate the effects of market failures in developed countries are less effective- in doing so in LOCs. This paper focuses, in particular, on those market failures which arise from imperfect information (as in the capital market) or which are almost inevitably associated with the learning which must occur if the less developed countries are successfully to make the transition to being more developed. learning, Among the consequences of learning-by-doing, of localized and of learning-to-learn are imperfections of competition, multiple equilibria, hysteresis, and the optimality of non-myopic policies. These market failures are markedly different from those that were the center of attention in earlier literature, which led to arguments for government planning. Government interventions need to recognize the source of market failures; informational problems affect the government no less than the private sector. In some cases, interventions should be directed at making markets work more effectively; in other cases, the government may take a role in establishing non-market institutions to ameliorate the effects of market failure.
Kicking away the ladder: development strategy in historical perspective (Anthem World History) The International Finance Corporation's MBA survey: how developing country firms rate local business school training (The World Bank Research Working Paper 3182)
- H J A Chang
Chang, H.J. (2002). Kicking away the ladder: development strategy in historical perspective (Anthem
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Chaudhry, A. (2003). The International Finance Corporation's MBA survey: how developing
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Paper 3182). Washington, D.C.: World Bank.
Light manufacturing in Africa The (2010) Picking winners, saving losers. The Economist
- H T Dinh
Dinh, H.T. et al. (2012). Light manufacturing in Africa. Washington, D.C.: World Bank.
Economist, The (2010). Picking winners, saving losers. The Economist, August 5, 2010.
Learning and industrial policy: implications for Africa. New thinking on industrial policy: implications for Africa Roundtable conference presented by the International Economic Association, Pretoria, South Africa. Co-sponsored by the Working paper prepared for JICA
- B Greenwald
- J Stiglitz
Greenwald, B. and Stiglitz, J. (2012, July). Learning and industrial policy: implications for Africa.
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by the International Economic Association, Pretoria, South Africa. Co-sponsored by the
Working paper prepared for JICA/IPD Africa Task Force Meeting
Yokohama, Japan, June 2-3, 2013
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