Resource information
Interest in investment climates has
emerged relatively recently. In the 1960s and 1970s,
governments in many countries believed they should play a
direct role in rural credit, input supply, production,
trade, transport, distribution, and even marketing. However,
in the 1980s and 1990s, government-dominated systems fell
into disgrace because of poor performance. For the rural
sector, the primary focus had traditionally been on
agriculture, particularly commercial agriculture and
agribusiness, which were perceived to be the main drivers of
rural growth. This study's essential findings and
policy implications are organized into the following six
chapters. Annexes provide supporting material. Chapter two
presents an overview of related work and of the literature;
it also describes the subsequent chapters'
methodological framework, including new ways of addressing
questions of endogeneity in these kinds of surveys while
seeking to isolate cause and effect. Chapter three, by
applying econometric analysis, measurably extends the
examination of enterprise performance and investment climate
constraints initiated in RIC1 (first rural investment
climate). A rigorous examination of enterprise dynamics and
entrepreneurial choice is developed in chapter four. Aiming
to highlight the differing effects on Rural Nonfarm
Enterprises (RNFEs), chapter five draws together the main
implications RIC2 findings on the rural investment climate
in the three country pilots. Community-level influences also
matter, and chapter six examines how the local IC and other
community characteristics shape the environment for economic
activity. Conclusions and recommendations appear in chapter
seven, including suggestions for using RIC results for
policy reform and for targeting the rural public
expenditures needed to foster improvements in the rural
investment climate. The annexes describe the databases
employed and the methodologies used in the study, as well
providing detailed regression results.
