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The mainstream investment climate literature often fails to take account the methods that firms in developing countries adopt in order to mitigate the effects of a poor investment climate. A better understanding of these informal “coping strategies” may add to the body of knowledge on what is important, and what isn’t, when it comes to prioritising investment climate reforms in developing and transitional economies. Original research from Vietnam, a country which is growing rapidly and in the midst of its transition from plan to market, shows how firms have been able to adapt their business operations given an unstable and partially reformed institutional enabling environment. By comparing the behaviour of manufacturing enterprises across a number of differing local jurisdictions, we are able to discern just how firm level coping strategies adapt. We find evidence that entrepreneurs are able to use a variety of informal institutional mechanisms to invest and operate in an inhospitable business environment where private property rights are not well protected and develop “second best” response mechanisms. These mechanisms include establishing formal and informal networks and linkages, seeking patronage and protection, and by sharing ownership with potential expropriators. We also find evidence that in the face of weak property rights protection, firms adopt approaches to reduce the costs to the original investors if third party expropriation is attempted and are less likely to reinvest retained earnings. Where they do invest, it is principally in dissolvable and/or movable assets, and adopting a higher discount rate or risk adjusted time value of money for capital investments. Similarly, we find evidence of linkages between measures of firm confidence in the local investment climate, and the extent to which firms are willing to employ outside salaried management. Thus, the thesis provides a contribution to the growing literature reviewing the development of formal and informal investment climate institutions in transitional and developing economies. The principle research finding, namely that the establishment and use of informal or second best institutional arrangements can offset some of the costs and risks associated with an otherwise weak and unstable business environment, has important implications for policymakers when it comes to the prioritization of investment climate reforms in developing countries.

This study explores the relation between Scandinavian donor private sector development and collaboration (PSD/PSC) policies and recipients of the support in Mozambique. It seeks to understand how such relations function in the complex local political and business environment. The study departs in theory regarding hybrid regimes and private sector development, and an analytical framework is designed as a model for relations based on theories on state-business relations and aid effectiveness. The material was gathered during a two-months field study where interviews were carried out with key actors of development cooperation such as embassy staff, fund managers and local entrepreneurs. The study finds that several PSC tools are shaped according to a western point of view and not always well adjusted to the local Mozambican context. It also finds that the design of the policies in many cases produces a high entrance barrier to Mozambican entrepreneurs, why most recipients are essentially foreign business people.

Efficient financing for small and medium enterprises (SMEs) is important so that SMEs can grow and be sustainable. This thesis applies a qualitative approach informed by the concept of private sector-led development (PSD) to examine the problems of SME financing in South Africa, and generates useful insight on the complexity of SME finance in a developing country. Results highlight how private SME finance can be an efficient driver of small business development. At the same time, results reveal a need to develop financing for ‘transitional’ SMEs, and to clearly define the role of private and government financiers, to improve the efficiency of the overall sector. The limits of private finance to widely fund all SMEs show a need to be critical and discerning when it comes to the involvement of the private sector to drive development initiatives. This limit, however, is also a core benefit of the private sector. / MA thesis.

Cette thèse retrace la construction historique d’une politique publique dite prioritaire de l’aide au développement. Les politiques de développement du secteur privé consistent à penser le développement économique par le renforcement d’un tissu économique privé local (micro-, petites et moyennes entreprises) et l’accueil d’investissements étrangers. La mise en place de ces politiques est ici étudiée dans le cadre des relations entre les institutions communautaires de l’Union européenne et les pays du groupe Afrique Caraïbes Pacifique (ACP), de 1975 à 2000, c’est-à-dire dans le temps des accords quinquennaux successifs de partenariat UE-ACP sous les Conventions de Lomé.Si ces politiques représentent un objectif aujourd’hui dominant de l’aide au développement, elles existaient déjà sous d’autres formes dès 1975. Notre recherche prend le parti d’étudier les évolutions d’une politique publique d’aide au développement depuis Bruxelles en regardant en particulier les liens des services de la direction générale du développement (DG VIII) de la Commission européenne avec les instruments communautaires ou paritaires au service de cette politique : la Banque européenne d’investissement et le Centre de développement industriel. L’histoire de ces politiques est croisée ponctuellement avec les évolutions propres à certains réseaux économiques transnationaux, aux Etats-membres, et à d’autres organisations internationales (Banque mondiale, OCDE). La recherche se place dans une double perspective d’histoire des organisations internationales et d’une histoire transnationale des réseaux économiques, pour retracer les trajectoires socioprofessionnelles individuelles et les dynamiques institutionnelles qui expliquent la fabrique des politiques européennes de développement.Trois temps sont étudiés : la coopération industrielle (1975-1985) qui vise à réussir le mariage d’intérêts entre les objectifs politiques des pays en développement dans le cadre du « Nouvel ordre économique international » et les besoins économiques de l’Europe ; l’émergence du développement du secteur privé comme nouvelle terminologie hégémonique au sein du Comité d’aide au développement (CAD) de l’OCDE (1985-1995) ; le temps des réformes institutionnelles et opérationnelles de l’aide au développement au nom d’une recherche d’efficacité pour le développement et de changements globaux (1995-2000). / This thesis retraces the historical construction of a so-called priority development aid policy. Private sector development policies consist of aiming at economic development by strengthening the local private sector (micro, small and medium-sized enterprises) and improving the foreign investment climate. The implementation of these policies is studied here in the context of the relations between the European Union institutions and the countries of the Africa-Caribbean-Pacific (ACP) group from 1975 to 2000, that is to say during the five successive EU-ACP partnership agreements known as the Lomé Conventions.Although these policies represent a dominant objective of development aid today, they already existed in other forms as early as 1975. The author decided to study the evolution of a development aid public policy with a particular focus on the institutions in Brussels. The author looks at the links of the services of the Directorate-General for Development (DG VIII) of the European Commission with the Community or joint instruments serving this policy: the European Investment Bank and the Centre for Industrial Development. The history of these policies is interspersed with the evolutions that are specific to certain transnational economic networks, member states, and other international organizations (World Bank, OECD). The research is placed in a double perspective of international organizations history and a transnational history of economic networks, to trace the individual socio-professional trajectories and the institutional dynamics that explain the making of European development policies.Three stages are studied: industrial co-operation (1975-1985), which aims to achieve a marriage of interests between the political objectives of developing countries in the framework of the “New International Economic Order” and the economic needs of Europe; the emergence of “private sector development” as a new hegemonic terminology within the OECD's Development Assistance Committee (DAC) (1985-1995); the time for institutional and operational reforms of development aid in the name of effectiveness and global changes (1995-2000).

The objective of the study is to identify how micro-enterprises can be integrated into local value chains by using the so-called "value chain approach". The "value chain approach" has become a relatively popular approach among donor agencies and NGOs engaged in Private Sector Development in recent years, being based on insights from studies on global value chains. The study includes investigation into the following points: 1) Which business linkages exist among micro-enterprises and with enterprises of different sizes and sectors, and how are they related to the upgrading process of micro-enterprises? 2) What influence does the legal status of micro-enterprises have on the development of business linkages and on the upgrading process? 3) How can the development of business linkages and the upgrading process (and, therefore, the integration into value chains) be supported and enhanced within the framework of PSD? The empirical study was conducted in Uganda. It includes a combination of qualitative and quantitative approaches: (1) a questionnaire-based survey among micro-entrepreneurs, and (2) expert or key informant interviews, using a semi-structured interview guideline. The study provides an assessment of the relevance and applicability of the "value chain approach" to micro-enterprises and local value chains in the context of a developing country characterised by low levels of industrialisation, as well as policy recommendations for practitioners (from public and private sectors, as well as donor community, NGOs and civil society). Furthermore, the study highlights the importance of the issue of informality of micro- and small-scale enterprises. (author's abstract)