Implementing the Market Approach to Enterprise Support : An Evaluation of Ten Matching Grant Schemes

Phillips, David A.

World Bank, Washington, DC

关键词: ACCOUNTING;    AUTONOMY;    BANK LENDING;    BIDDING;    BUSINESS DEVELOPMENT;   

DOI  :  10.1596/1813-9450-2589
RP-ID  :  WPS2589

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Developing viable new business iscritical to recovery, and long-term growth, especially intransition economies. There has been a long history ofpublic support of enterprise development, starting withcentralized state agency initiatives, but moving morerecently to decentralized instruments for development of thebusiness services market. The window of time during whichthe benefits of intervention are likely to be greatest: whena market is in its infancy, and its development isconstrained by uncertainty, and lack of information.Interventions for enterprise support should bedemand-responsive, and flexibly organized. In somecircumstances, centralized assistance may still beeffective, but it is generally better to use competitiveprivate service providers responding to enterprises'changing needs. The main task is to stimulate the privateservices sector, improving its capacity to respond to thedemands of new, and expanding private enterprises. Supportfor enterprises has tended to be either free, or heavilysubsidized. But such subsidies can be justified only ifinterventions efficiently supply goods. Providing technical,and management know-how can be a public good if it generatesexternalities - if, for example, know-how benefits can bedisseminated at proportionately low additional cost. Anysubsidy for an intervention should be temporary, and shouldbe phased out when the main objective of intervention isachieved - that is, when the market takes off. Grants shouldgenerally be for know-how, not for equipment. There may be acase for unbundling the know-how component of loans(including feasibility studies, and follow-up expertservices) for grant funding. A package combining loans andgrants - through a single financial institution, or throughseparate institutions - may work provided safeguards can beput in place to prevent perverse use of grants. The matchinggrant model, which is used increasingly in the World Bank,and elsewhere, is one solution - but it must be justified,and carefully designed. After evaluating ten matching grantfunds, the author concludes that performance is mixed. Bestpractice models are needed. Ensuring economic benefitsrequires proactive management, with clear objectives ofmarket facilitation ("making a market"). And itrequires a balance between rapid grant approval procedures,and careful selection of services for grants.