Although Sub-Saharan Africa is increasingly attractive to investors, structural transformation and formal job growth remain slow. Industrial surveys in many countries show that some highly productive firms co-exist with many low-productivity businesses. Why do these “productivity islands” not diffuse more rapidly to create the “missing middle”? Our research (pdf) suggests three important factors.
In response to Seth Kaplan: Elites that are in the position to use the tools presented effectively, will advance their own agenda.
A major reason why less developed countries fail to develop is the structural exclusion of large segments of their population from their economic, social and political development. In my estimation, roughly three billion people—one out of every two in the developing world—face discrimination in how their governments and markets work. This institutional bias has a dramatic impact on access to education, security and the rule of law, and to opportunities to advance.
The recently launched Millennium Development Goals Report gives reason for optimism about achievement of the first goal: reduce extreme poverty by half. However, the figures do not display the little progress made for the poorest of the poor, those frequently excluded from poverty eradication programmes. A specific target is required in the post-2015 goals to make sure that no one will be ‘left behind’.