Publication

This paper examines why high productivity firms and low-productivity companies have not better supported the creation of a 'middle' market in Sub-Saharan Africa (SSA). The authors argue that it is mainly due to three factors: 1) the poor business climate constraining the allocation of production factors between sectors and firms; 2) the complex business-government relations in Africa’s small economies; and 3) the distribution of firm capabilities. They conclude that these trends have roots in Africa’s geography and its distinctive history, including the legacy of its colonial period on state formation and market structure.