[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-112791-en":3,"doc-seo-112791-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},112791,2336464648746,"Skyler","https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c",8,"Research & Report","Economic Transformation in Africa from the Bottom Up - New Evidence from Tanzania","Tanzania’s labor productivity growth coincides with a rapid rise in small, largely informal micro, small, and medium-sized enterprises (MSMEs). Using the first nationally representative MSME survey, the study describes where these firms operate and what they do, showing a presence in both rural and urban areas and concentration in trade services and manufacturing. Evidence indicates many owners prefer remaining in their current jobs, while about 15% of small businesses materially contribute to economy-wide labor productivity. Policy guidance emphasizes targeting the most promising firms for productive employment.","Pub lic Disclosure Authorized Pub lic Disclosure Authorized  \nThe World Bank Economic Review, 34(Supplement), 2020, S58–S62 doi: 10.1093/wber/lhz035 Supplementary Article  \nEconomic Transformation in Africa from the Bottom Up: New Evidence from Tanzania  \nXinshen Diao, Josaphat Kweka, Margaret McMillan, and Zara Qureshi Abstract  \nTanzania’s rapid labor productivity growth has been accompanied by a proliferation of small, largely informal firms. Using Tanzania’s first nationally representative survey of micro, small, and medium-sized enterprises (MSMEs)—this paper explores the nature of these businesses. It finds that these firms are located in both rural and urban areas and that they operate primarily in trade services and manufacturing. Roughly half of all business owners say they would not leave their job for a full-time salaried position. Fifteen percent of these small businesses contribute significantly to economy-wide labor productivity. The most important policy implication of the evidence presented in this paper is that if the goal is to grow MSMEs with the potential to contribute to productive employment, policies must be targeted at the most promising firms.  \nJEL classification: O4, O55  \nKeywords: MSMEs, labor productivity growth, firm-level labor productivity, informal sector, kernel densities, formality  \nAfrica’s impressive performance over the past two decades has been accompanied by a proliferation of small firms, many of which operate in the informal sector. Researchers at the African Development Bank (2013) estimate that the informal sector accounts for around 55 percent of Sub-Saharan Africa’s GDP and 80 percent of its employment.1 This is potentially alarming, since firms in the informal sector are widely viewed as unproductive employers of last resort.2 On the other hand, very little is known about these small firms (Li and Rama 2015) .  \nTanzania is no exception. Between 2002 and 2012, Tanzania’s economy grew more rapidly than at any other time in recent history; average annual GDP growth was 6.5 percent, and average annual labor productivity growth was 4.1 percent. More than three-quarters of this labor productivity growth was accounted for by structural change; the remainder of the growth is largely attributable to withinsector productivity growth in agriculture. The growth attributable to structural change is almost entirely  \nXinshen Diao is a Deputy Division Director at the International Food Policy Research Institute, Washington, DC; her email address is [x.diao@cgiar.org. Josaphat Kweka](x.diao@cgiar.org. Josaphat Kweka) is Lead Consultant and CEO at Talanta International, Washington, DC, and Senior Research Associate at the Economic and Social Research Foundation; his email address is [josaphat.kweka@gmail.com](josaphat.kweka@gmail.com). Margaret McMillan (corresponding author) is a Professor of Economics at Tufts University, Medford, MA, Senior Research Fellow at the International Food Policy Research Institute, and Faculty Research Associate of the National Bureau of Economic Research; her email address [is margaret.mcmillan@tufts.edu. Zara Qureshi](is margaret.mcmillan@tufts.edu. Zara Qureshi) is a research analyst at Fidelity Investments; her email address is [zaranaeem@gmail.com](zaranaeem@gmail.com).  \n1 These numbers also include agriculture. This paper focuses on the nonagricultural private sector. There is clearly room for modernizing agriculture, but that is not the focus of this paper.  \n2 See, for example, La Porta and Shleifer (2011) .  \n© The Author(s) 2019 . Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK.  \nAll rights reserved. For permissions, please e-mail: [journals.permissions@oup.com](journals.permissions@oup.com)  \nDownloaded from [https://academic.oup.com/wber/article/34/Supplement_1/S58/5686214 by guest on 23 June 2021](https://academic.oup.com/wber/article/34/Supplement_1/S58/5686214 by guest on ","cbCaihWaOhLEWeCb","https://ap.wps.com/l/cbCaihWaOhLEWeCb","pdf",135163,1,5,"English","en",105,"# Introduction\n## MSME Survey and Coverage\n# Where Are These Firms and What Do They Do?\n## Geographic Location and Business Lines\n## Motivations of Business Owners\n## Firm-Level Labor Productivity\n## Policy Implications","[{\"question\":\"What trends in Tanzania motivate this study of MSMEs?\",\"answer\":\"Tanzania experienced rapid labor productivity growth alongside a proliferation of small, mostly informal firms, prompting analysis of what these businesses are like and how they contribute to productivity.\"},{\"question\":\"Where are the surveyed firms located and what activities dominate?\",\"answer\":\"The firms are found in both rural and urban areas, and they primarily operate in trade services and manufacturing.\"},{\"question\":\"What is the main policy implication of the study?\",\"answer\":\"To grow MSMEs that can create productive employment and meaningfully raise labor productivity, policies should target the most promising 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