Enterprise scale, economic policy and development : a synthesis of USAID"s employment and enterprise policy analysis (EEPA) project"s research

Moreover, in sectors where small firms predominate, small firms are often more efficient in total resource use than are larger ones. This report, which summarizes research conducted under A.I.D."s Employment and Enterprise Policy Analysis Project, describes the dynamics of small enterprises in the development process, analyzes the impact of economic policies on small enterprises, and identifies priorities for policy reform. The section on enterprise dynamics covers the life cycle of firms, employment, efficiency (by scale and sector), linkages between large and small firms, relations with traders, and the impact of small enterprises on the environment. The discussion of economic policies examines those related to agriculture, trade, capital markets, labor markets, and tax policies. In analyzing policy reform priorities, the report addresses the issue of whether policies should be neutral or targeted towards specific sectors or enterprises. It also provides guidelines for "hard" and "soft" states, describes alternative policies based on the Taiwan and South Korean models, and identifies the particular challenges faced by African states.