In 2008, the World Bank Africa Region launched a three-year cross-country study on Improving the Productivity and Reducing Risk of Household Enterprises. One objective of this study was to highlight the scale and persistence of self-employment and economic activities based in the household rather than “firms,” even in economies with strong growth both overall and in wage employment (which remains too small to absorb a substantial share of new entrants in most developing countries). Hence the focus on “household enterprises,” defined as self-employed persons together with any family members or casual workers assisting them (i.e., not involving contractual workers), representing the bottom of the pyramid of micro and small enterprises (MSEs). Another objective is to provide empirical evidence from a number of countries not only on the status of informal household enterprises but also on the policies and programmes that affect them.
The WIEGO network supported the preparation of the conceptual framework and methodology for carrying out the country studies. In the first phase, WIEGO helped to assemble a team to prepare background papers on the state of the art in the areas of micro-finance, business development services, skills development, commercial law, and economic policies.1 In the next phase, a diagnostic methodology was prepared drawing on the analysis of these background papers to provide a consistent framework and approach for carrying out the Country Studies. These papers will be available soon, and links provided here.
The World Bank then engaged local consultants to apply the methodology in Ghana, Mozambique, Rwanda, Tanzania and Uganda. These country studies were undertaken in several steps during 2009-11, including periodic consultation with stakeholders at the national level. Most studies began with an initial stock-taking of the empirical data on household enterprises and the policies, programmes and institutions that affect them. The findings and issues identified were then reviewed by stakeholders as a basis for defining key questions that required further documentation and empirical investigation. Field studies were conducted using a combination of focus groups discussions (especially with micro-entrepreneurs and their business associations), structured questionnaires administered to household enterprises, and key informant interviews with various agencies supporting the sector.
The key findings and recommendations were then synthesized and discussed with stakeholders in each country, as a basis for producing a comprehensive Country Report for each. This process is intended to build consensus and ownership in identifying practical policy and programme interventions that can increase the productivity and incomes and reduce their vulnerability of household enterprises (and MSEs and informal enterprises generally), e.g., by making public policies and investments more favorable and markets, information and training more accessible to informal enterprises and workers. In some countries, this has generated interest in preparing a national policy on informal enterprises.
The World Bank is in the process of consolidating the findings from the Country Studies into a comparative report that will synthesize the lessons learned and recommendations for policies and programmes to support employment and productivity in household enterprises and help mitigate the risks that they face. Links to the Country Reports and Comparative Review will be posted here when available (expected in 2012).
1 William Steel (founding Member, WIEGO Board) and Marty Chen (founding Member, International Coordinator, WIEGO) were asked by the World Bank Africa Region to lead a review of programmes and policies in support of the smallest informal enterprises in Africa. The team of reviewers included James Heintz and Imraan Valodia from the WIEGO network, who undertook the review of economic policies. World Bank staff contributed background papers on skills development and job creation. These studies were presented at a one-day workshop held at the World Bank headquarters in Washington, D.C. in June 2008. William Steel and Don Snodgrass drafted the Diagnostic Methodology. Preparation was supported by the World Bank, the Multidonor Trust Fund on Labor Markets, Job Creation, and Economic Growth funded by the German, Norwegian, Austrian, and Korean governments, and the donors to the TFESSD Trust Fund. The findings, interpretations, and conclusions expressed in the papers do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent.