| Abstract: |
Although microenterprises are the most prevalent employer in Africa, boosting
their productivity remains a development challenge. Theoretically,
microenterprise business associations could foster technology, improve access
to inputs, pool risk, ensure coordination, and facilitate credit for
businesses. However, basic facts about their scope and roles are missing from
the literature. This study establishes descriptive results to shed light on
the nature of these networks in West Africa. First, fewer than 10 percent of
informal business owners are members, although there is large industry
variation. Second, members tend to be older and larger incumbent businesses
with male owners, potentially stifling competition and entrenching gender
gaps. Third, most associations are more aptly described as providers of
excludable, industry-specific services than as vehicles for collective action
and advocacy. Fourth, membership helps explain performance differences among
observably similar businesses. Members are more productive, profitable, and
financially included relative to similar non-members, although such premia
only materialize in a few industries. |