Public Policy Effectiveness and Entrepreneurial Growth in Developing Markets

Ibrahim Abdullahi
DOI: http://dx.doi.org/10.19085/sijmd120101

Abstract

This paper examines how government policies shape entrepreneurial activity in developing economies, with a focus on India, Brazil, and South Africa. Drawing on institutional economics and the entrepreneurship literature, it argues that the effectiveness of public policy in fostering new venture creation depends not only on formal regulatory reforms but also on the degree to which informal institutions, enforcement capacity, and market conditions align with stated policy objectives. Evidence from the three country cases shows that even well-designed programs frequently produce limited results when implementation gaps, bureaucratic inertia, or credit market failures undercut their intent. The paper also identifies conditions under which policy interventions have demonstrably improved entrepreneurial outcomes, including streamlined business registration, targeted financing schemes, and coordinated ecosystems linking government, academia, and industry. Findings point to the need for context-sensitive policy design that accounts for each economy's structural characteristics rather than transplanting frameworks developed in advanced economies.

Keywords

Entrepreneurship, public policy, developing economies, institutional environment, India, Brazil, South Africa, SME policy

Full Text:

PDF

References

Acemoglu, D., Johnson, S., & Robinson, J. A. (2001). The colonial origins of comparative development: An empirical investigation. American Economic Review, 91(5), 1369–1401. https://doi.org/10.1257/aer.91.5.1369

Baumol, W. J. (1990). Entrepreneurship: Productive, unproductive, and destructive. Journal of Political Economy, 98(5), 893–921. https://doi.org/10.1086/261712

Djankov, S., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2002). The regulation of entry. Quarterly Journal of Economics, 117(1), 1–37. https://doi.org/10.1162/003355302753399436

Government of India. (2016). Startup India action plan. Department for Promotion of Industry and Internal Trade. https://www.startupindia.gov.in

North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.

Republic of South Africa. (2012). National Development Plan 2030: Our future — make it work. National Planning Commission. https://www.gov.za/issues/national-development-plan-2030

Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217–226. https://doi.org/10.5465/amr.2000.2791611

Wennekers, S., & Thurik, R. (1999). Linking entrepreneurship and economic growth. Small Business Economics, 13(1), 27–56. https://doi.org/10.1023/A:1008063200484

World Bank. (2020). Doing business 2020: Comparing business regulation in 190 economies. World Bank. https://doi.org/10.1596/978-1-4648-1440-2

Be a part of worldclass research: Publish with us