Clarke, George (2010): Are Managers’ Perceptions of Constraints to Growth Reliable? Evidence from a Natural Experiment in South Africa.
Download (374kB) | Preview
Can surveys of what managers see as the biggest problems that their firm faces provide useful information on the main constraints to private sector and economic development and be used to prioritize reforms in these areas? One of many concerns about doing this is that managers’ responses to questions about specific areas of the investment climate might reflect their assessment of overall investment climate or their overall business confidence rather than their views on that specific area of the investment climate. This paper uses a natural experiment in South Africa to assess whether this is the case. When the World Bank’s 2007-2008 Enterprise Survey was being carried out, a major electricity crisis hit South Africa. The crisis resulted in many more managers saying that power was a serious constraint on enterprise operations—the share rose from about 10 percent of managers before the crisis to close to 50 percent after the crisis. But it also resulted in greater concern about most other areas of the investment climate—including areas such as taxation, regulation, and other areas of infrastructure that were unrelated to the crisis. This suggests that managers do not fully compartmentalize their responses. Moreover, the changes were large enough to suggest that cross-time and cross-country comparisons of perception data will be difficult.
|Item Type:||MPRA Paper|
|Original Title:||Are Managers’ Perceptions of Constraints to Growth Reliable? Evidence from a Natural Experiment in South Africa|
|Keywords:||Subjective Data; Firm-level Data; Perceptions; South Africa|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy
?? C42 ??
O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O20 - General
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
|Depositing User:||George R.G. Clarke|
|Date Deposited:||18. Jan 2010 11:02|
|Last Modified:||14. Feb 2013 21:19|
Azfar, Omar, and Peter Murrell. 2009. "Identifying Reticent Respondents: Assessing the Quality of Survey Data on Corruption and Values." Economic Development and Cultural Change 57(2):387–411.
Beck, Thorsten, Asli Demirgüç-Kunt, and Vojislav Maksimovic. 2005. "Financial and Legal Constraints to Firm Growth: Does Firm Size Matter?" Journal of Finance 60(1):137–177.
Bertrand, Marianne, and Sendhil Mullainathan. 2001. "Do People Mean What They Say? Implications for Subjective Survey Data." American Economic Review: Papers and Proceedings 91(2):67–72.
Braithewaite, Tom. 2009. "US Drops Down Competitiveness League Table." Financial Times, September 8.Available on line at http://www.ft.com/cms/s/0/459bc644-9c56-11de-ab58-00144feabdc0.html?nclick_check=1.
Bureau of Economic Research and Rand Merchant Bank. 2008. "Business Confidence Down Strongly." Rand Merchant Bank: Johannesburg, South Africa.
Center for Development and Enterprise Roundtable. 2008. "South Africa's Electricity Crisis: How Did We Get Here? And How Do We Get Things Right?" Center for Development and Enterprise: Johannesburg, South Africa.
Clarke, George R. G, Robert Cull, and Maria Soledad Martinez Peria. 2006. "Foreign Bank Participation and Access to Credit Across Firms in Developing Countries." Journal of Comparative Economics 34(4):774–796.
Clarke, George R. G. 2008. "How Petty is Petty Corruption in Africa? Evidence from Firms Surveys." World Bank: Washington DC. Available on line at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1117631. Processed.
Clarke, George R. G., James Habyarimana, Michael Ingram, David Kaplan, and Vijaya Ramachandran. 2007. An Assessment of the Investment Climate in South Africa. Washington DC: World Bank.
Clarke, George R. G., James Habyarimana, David Kaplan, and Vijaya Ramachandran. 2008. "Why Isn't South Africa Growing Faster? Microeconomic Evidence From a Firm Survey." Journal of International Development 20(7):837–868.
Economist Intelligence Unit. 2007. "South Africa: Country Report, September 2007." Economist Intelligence Unit: London, UK.
Gelb, Alan, Vijaya Ramachandran, Manju Kedia Shah, and Ginger Turner. 2006. "What Matters to African Firms? The Relevance of Perceptions Data." World Bank: Washington DC. Processed.
Hallward-Driemeier, Mary, and Reyes Alterido. 2009. "Comparing Apples with...Apples: How to Make (More) Sense of Subjective Rankings of Constraints to Business." World Bank 5054. Washington DC.
Hausmann, Ricardo. 2006. "Final Recommendations of the International Panel on Growth." National Treasury: Pretoria, South Africa.
Hausmann, Ricardo, and Andres Velasco. 2005. "Slow Growth in Latin America: Common Outcomes, Common Causes?" Kennedy School of Government: Boston MA. Processed.
Hellman, Joel, Geraint Jones, Daniel Kaufmann, and Mark Schankerman. 1999. "Measuring Governance and State Capture: The Role of Bureaucrats and Firms in Shaping the Business Environment." EBRD Working Paper 51. London, UK.
Jensen, Nathan M., Quan Li, and Aminur Rahman. 2008. "Heard Melodies Are Sweet, But those Unheard Are Sweeter : Understanding Corruption Using Cross-National Firm-Level Surveys." Policy Research Working Paper 4413. World Bank, Washington DC. Available on line at http://go.worldbank.org/FVMFX9KVJ0.
Kaufmann, Daniel, Aart Kraay, and Massimo Mastruzzi. 2008. "Governance Matters VII: Governance Indicators for 1996-2007." Policy Research Working Paper 4664. World Bank, Washington DC. Available on line at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1148386.
Lewis, Barbara. 2008. "South Africa's Power Crisis also an Opportunity." Reuters UK, January 31. McCreal, Chris. 2008. "Mines Shut Down as South Africa Faces an Electricity Emergency." The Guardian (UK), January 25.
Porter, Michael E, Klaus Schwab, Xavier Sala-i-Martin, and Augusto Lopez-Claros. 2005. The Global Competitiveness Report 2004-2005. Geneva, Switzerland: World Economic Forum.
Presidency of the Republic of South Africa. 2006. "Accelerated and Shared Growth Initiative for South Africa (AsgiSA)." Government of Republic of South Africa: Pretoria, South Africa. Available on line at http://www.info.gov.za/asgisa/asgisa.htm#infrastructure.
Rodrik, Dani, 2007. The (Mis)Use of ICAs. Retrieved 11-8-2009, from Dani Rodrik web site: http://rodrik.typepad.com/dani_rodriks_weblog/2007/12/the-misuse-of-i.html.
Schwab, Klaus. 2009. The Global Competitiveness Report 2009-2010. Geneva, Switzerland: World Economic Forum.
Transparency International. 2008. "Transparency International Corruption Perceptions Index 2008." Transparency International: Berlin, Germany. Available on line at http://www.transparency.org/policy_research/surveys_indices/cpi/2008.
World Bank. 2008. "Enterprise Survey (Productivity and Investment Climate Survey) in South Africa: Sample Survey Design." World Bank: Washington DC. Available on line at www.enterprisesurveys.org.
--------. 2009a. "An Assessment of Zambia's Private Sector." World Bank: Washington DC.
--------. 2009b. "Enterprise Survey and Indicator Surveys." World Bank: Washington DC. Available on line at http://www.enterprisesurveys.org/documents/Sampling_Note.pdf