Economic Transformation in Africa from the Bottom Up: Evidence from Tanzania

Xinshen Diao (), Josaphat Kweka and Margaret McMillan

No 22889, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: At roughly 4% per annum, labor productivity in Tanzania has grown more rapidly over the past 12 years than at any other time in recent history. Employment growth has also been strong keeping up with population growth at roughly 2.5 percent per annum; the bulk of employment growth (90%) has been in the non-agricultural sector. However, the vast majority of this non-agricultural employment growth has occurred in the informal sector. Using Tanzania’s first nationally representative survey of micro, small and medium sized enterprises - we show that firms in the informal sector contributed roughly half a percentage point to economy-wide labor productivity growth in Tanzania between 2002 and 2012. However, virtually all of the labor productivity growth contributed by informal firms came from a small subset of firms we call the in-between firms. We consider attributes of the in-between firms that could be used for targeting financial and business services to firms with the potential to grow. We find two salient characteristics of firms in the in-between sector that might lend themselves to targeting – their owners are more likely to keep written accounts and they are more likely to keep their savings in formal bank accounts.

JEL-codes: O4 O55 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-afr and nep-iue
Note: DEV PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published as Xinshen Diao & Josaphat Kweka & Margaret McMillan & Zara Qureshi, 2020. "Economic Transformation in Africa from the Bottom Up: New Evidence from Tanzania," The World Bank Economic Review, vol 34(Supplement_1), pages S58-S62.

Downloads: (external link)
http://www.nber.org/papers/w22889.pdf (application/pdf)

Related works:
Working Paper: Economic transformation in Africa from the bottom up: Evidence from Tanzania (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:22889

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w22889

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().