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In 2011, India's economic growth has slowed to below 7 percent and the stock markets mirrored the weakening economic conditions, but recovered somewhat in early 2012. Industrial sector output growth briefly slipped into negative territory. On the demand side, fixed investment and consumption growth slowed. India's exports were growing very strongly through 2011 despite the worsening economic conditions in Europe, which continued to be India's most important export market. The balance of payments continued to be in surplus during April-September 2011, but the Reserve Bank of India (RBI) reserves declined by a small amount since then. The rupee nevertheless depreciated by 20 percent between August and December, before recovering somewhat in early 2012. Macroeconomic policies presented a mixed picture: the central government is likely to miss the ambitious target for fiscal consolidation it had set in the FY2011-12 budget by about one percent of Gross Domestic Product (GDP). Slippages are due to lower-than-expected revenues and increasing outlays on subsidies, which had been given low budgetary allocations in anticipation of strong policy changes, which failed to materialize. In India, the slowdown in GDP growth witnessed over the last two quarters is likely to extend into the coming fiscal year because of the weakness in investment. In FY2011-12 and FY2012-13, GDP growth is forecast to reach around 7-7.5 percent, a significant slowdown from the 9-10 percent growth in the run-up to the global financial crisis. The slowdown is at least partly caused by structural problems (power projects facing delays due to the lack of coal and gas feedstock, mining and the telecom sectors hit by corruption scandals, unavailability of land and infrastructure).

The conceptual framework of neoclassical economics posits that individual decision-making processes can be represented as maximization of some objective function. In this framework, people's goals and desires are expressed through the means of preferences over outcomes; in addition, in choosing according to these objectives, people employ subjective beliefs about the likelihood of unknown states of the world. For instance, in the subjective expected utility paradigm, people linearly combine their probabilistic beliefs and preferences over outcomes to form an expected utility function. Much of the parsimony and power of theoretical economic analysis stems from the striking generality and simplicity of this framework. At the same time, the crucial importance of preferences and beliefs in our conceptual apparatus in combination with the heterogeneity in choice behavior that is observed across many economic contexts raises a number of empirical questions. For example, how much heterogeneity do we observe in core preference or belief dimensions that are relevant for a broad range of economic behaviors? If such preferences and beliefs exhibit heterogeneity, then what are the origins of this heterogeneity? How do beliefs and preferences form to begin with? And how does variation in beliefs and preferences translate into economically important heterogeneity in choice behavior? This thesis is organized around these broad questions and hence seeks to contribute to the goal of providing an improved empirical understanding of the foundations and economic implications of individual decision-making processes. The content of this work reflects the deep belief that understanding and conceptualizing decision-making requires economists to embrace ideas from a broad range of fields. Accordingly, this thesis draws insights and techniques from the literatures on behavioral and experimental economics, cultural economics, household finance, comparative development, cognitive psychology, and anthropology. Chapters 1 through 3 combine methods from experimental economics, household finance, and cognitive psychology to investigate the effects of bounded rationality on the formation and explanatory power of subjective beliefs. Chapters 4 through 6 use tools from cultural economics, anthropology, and comparative development to study the cross-country variation in economic preferences as well as its origins and implications. The formation of beliefs about payoff-relevant states of the world crucially hinges on an adequate processing of incoming information. However, oftentimes, the information people receive is rather complex in nature. Chapters 1 and 2 investigate how boundedly rational people form beliefs when their information is subject to sampling biases, i.e., when the information pieces people receive are either not mutually independent or systematically selected. Chapter 1 is motivated by Akerlof and Shiller's popular narrative that from time to time some individuals or even entire markets undergo excessive belief swings, which refers to the idea that sometimes people are overly optimistic and sometimes overly pessimistic over, say, the future development of the stock market. In particular, Akerlof and Shiller argue that such "exuberance" or excessive pessimism might be driven by the pervasive "telling and re-telling of stories". In fact, many real information structures such as the news media generate correlated rather than mutually independent signals, and hence give rise to severe double-counting problems. However, clean evidence on how people form beliefs in correlated information environments is missing. Chapter 1, which is joint work with Florian Zimmermann, provides clean experimental evidence that many people neglect such double-counting problems in the updating process, so that beliefs are excessively sensitive to well-connected information sources and follow an overshooting pattern. In addition, in an experimental asset market, correlation neglect not only drives overoptimism and overpessimism at the individual level, but also gives rise to a predictable pattern of over- and underpricing. Finally, investigating the mechanisms underlying the strong heterogeneity in the presence of the bias, a series of treatment manipulations reveals that many people struggle with identifying double-counting problems in the first place, so that exogenous shifts in subjects' focus have large effects on beliefs. Chapter 2 takes as starting point the big public debate about increased political polarization in the United States, which refers to the fact that political beliefs tend to drift apart over time across social and political groups. Popular narratives by, e.g., Sunstein, Bishop, and Pariser posit that such polarization is driven by people selecting into environments in which they are predominantly exposed to information that confirms their prior beliefs. This pattern introduces a selection problem into the belief formation process, which may result in polarization if people failed to take the non-representativeness among their signals into account. However, again, we do not have meaningful evidence on how people actually form beliefs in such "homophilous" environments. Thus, Chapter 2 shows experimentally that many people do not take into account how their own prior decisions shape their informational environment, but rather largely base their views on their local information sample. In consequence, beliefs excessively depend on people's priors and tend to be too extreme, akin to the concerns about "echo chambers" driving irrational belief polarization across social groups. Strikingly, the distribution of individuals' naivete follows a pronounced bimodal structure - people either fully account for the selection problem or do not adjust for it at all. Allowing for interaction between these heterogeneous updating types induces little learning: neither the endogenous acquisition of advice nor exogenously induced dissent lead to a convergence of beliefs across types, suggesting that the belief heterogeneity induced by selected information may persist over time. Finally, the paper provides evidence that selection neglect is conceptually closely related to correlation neglect in that both cognitive biases appear to be driven by selective attentional patterns. Taken together, chapters 1 and 2 show that many people struggle with processing information that is subject to sampling issues. What is more, the chapters also show that these biases might share common cognitive foundations, hence providing hope for a unified attention-based theory of boundedly rational belief formation. While laboratory experimental techniques are a great tool to study the formation of beliefs, they cannot shed light on the relationship between beliefs and economically important choices. In essentially all economic models, beliefs mechanically map into choice behavior. However, it is not evident that people's beliefs play the same role in generating observed behavior across heterogeneous individuals: while some people's decision process might be well-approximated by the belief and preference-driven choice rules envisioned by economic models, other people might use, e.g., simple rules of thumb instead, implying that their beliefs should be largely irrelevant for their choices. That is, bounded rationality might not only affect the formation of beliefs, but also the mapping from beliefs to choices. In Chapter 3, Tilman Drerup, Hans-Martin von Gaudecker, and I take up this conjecture in the context of measurement error problems in household finance: while subjective expectations are important primitives in models of portfolio choice, their direct measurement often yields imprecise and inconsistent measures, which is typically treated as a pure measurement error problem. In contrast to this perspective, we argue that individual-level variation in the precision of subjective expectations measures can actually be productively exploited to gain insights into whether economic models of portfolio choice provide an adequate representation of individual decision processes. Using a novel dataset on experimentally measured subjective stock market expectations and real stock market decisions collected from a large probability sample of the Dutch population, we estimate a semiparametric double index model to explore this conjecture. Our results show that investment decisions exhibit little variation in economic model primitives when individuals provide error-ridden belief statements. In contrast, they predict strong variation in investment decisions for individuals who report precise expectation measures. These findings indicate that the degree of precision in expectations data provides useful information to uncover heterogeneity in choice behavior, and that boundedly rational beliefs need not necessarily map into irrational choices. In the standard neoclassical framework, people's beliefs only serve the purpose of achieving a given set of goals. In many applications of economic interest, these goals are well-characterized by a small set of preferences, i.e., risk aversion, patience, and social preferences. Prior research has shown that these preferences vary systematically in the population, and that they are broadly predictive of those behaviors economic theory supposes them to. At the same time, this empirical evidence stems from often fairly special samples in a given country, hence precluding an analysis of how general the variation and predictive power in preferences is across cultural, economic, and institutional backgrounds. In addition, it is conceivable that preferences vary not just at an individual level, but also across entire populations - if so, what are the deep historical or cultural origins of this variation, and what are its (aggregate) economic implications? Chapters 4 through 6 take up these questions by presenting and analyzing the Global Preference Survey (GPS), a novel globally representative dataset on risk and time preferences, positive and negative reciprocity, altruism, and trust for 80,000 individuals, drawn as representative samples from 76 countries around the world, representing 90 percent of both the world's population and global income. In joint work with Armin Falk, Anke Becker, Thomas Dohmen, David Huffman, and Uwe Sunde, Chapter 4 presents the GPS data and shows that the global distribution of preferences exhibits substantial variation across countries, which is partly systematic: certain preferences appear in combination, and follow distinct economic, institutional, and geographic patterns. The heterogeneity in preferences across individuals is even more pronounced and varies systematically with age, gender, and cognitive ability. Around the world, the preference measures are predictive of a wide range of individual-level behaviors including savings and schooling decisions, labor market and health choices, prosocial behaviors, and family structure. We also shed light on the cultural origins of preference variation around the globe using data on language structure. The magnitude of the cross-country variation in preferences is striking and raises the immediate question of what brought it about. Chapter 5 presents joint work with Anke Becker and Armin Falk in which we use the GPS to show that the migratory movements of our early ancestors thousands of years ago have left a footprint in the contemporary cross-country distributions of preferences over risk and social interactions. Across a wide range of regression specifications, differences in preferences between populations are significantly increasing in the length of time elapsed since the respective groups shared common ancestors. This result obtains for risk aversion, altruism, positive reciprocity, and trust, and holds for various proxies for the structure and timing of historical population breakups, including genetic and linguistic data or predicted measures of migratory distance. In addition, country-level preference endowments are non-linearly associated with migratory distance from East Africa, i.e., genetic diversity. In combination with the relationships between language structure and preferences established in Chapter 4, these results point to the importance of very long-run events for understanding the global distribution of some of the key economic traits. Given these findings on the very deep roots of the cross-country variation in preferences, an interesting - and conceptually different - question is whether such country-level preference profiles might have systematic aggregate economic implications. Indeed, according to standard dynamic choice theories, patience is a key driving factor behind the accumulation of productive resources and hence ultimately of income not just at an individual, but also at a macroeconomic level. Using the GPS data on patience, Chapter 6 (joint work with Thomas Dohmen, Armin Falk, David Huffman, and Uwe Sunde) investigates the empirical relevance of this hypothesis in the context of a micro-founded development framework. Around the world, patient people invest more into human and physical capital and have higher incomes. At the macroeconomic level, we establish a significant reduced-form relationship between patience and contemporary income as well as medium- and long-run growth rates, with patience explaining a substantial fraction of development differences across countries and subnational regions. In line with a conceptual framework in which patience drives income through the accumulation of productive resources, average patience also strongly correlates with aggregate human and physical capital accumulation as well as investments into productivity. Taken together, this thesis has a number of unifying themes and insights. First, consistent with the vast heterogeneity in observed choices, people exhibit a large amount of variation in beliefs and preferences, and in how they combine these into choice rules. Second, at least part of this heterogeneity is systematic and has identifyable sources: preferences over risk, time, and social interactions appear to have very deep historical or cultural origins, but also systematically vary with individual characteristics; belief heterogeneity, on the other hand, is partly driven by bounded rationality and its systematic, predictable effects on information-processing. Third, and finally, this heterogeneity in beliefs and preferences is likely to have real economic implications: across cultural and institutional backgrounds, preferences correlate with the types of behaviors that economic models envision them to, not just across individuals, but also at the macroeconomic level; subjective beliefs are predictive of behavior, too, albeit with the twist that certain subgroups of the population do not appear to entertain stable belief distributions to begin with. In sum, (I believe that) much insight is to be gained from further exploring these fascinating topics.

IntroductionRapidly-growing enterprises (RGEs) can play a crucial role in emerging economies with lasting impact on their economic growth. This type of enterprises must manage the change to remain both competitive and flexible in order to survive. Similarly, the emerging economies are characterized by rapid structural change in their socio-economic institutions and traditional practices for gaining competitiveness to face the competitive pressures of the increasing globalized economy. In general, SMEs have the requisite flexibility to adapt to changing circumstances, to become a vehicle for enhancing competitiveness by upgrading their capabilities in a country, and thus become major contributors to economic growth. The added feature of RGEs is that they grow faster and achieve higher growth while facing more constrained resources than their SME counterparts. We posit that emerging economies face similar barriers and challenges and RGEs can provide valuable lessons for more effective management. Change in emerging economies is inevitable and will manifest itself at the firm, industry and institutional levels. Regardless of the original source, the instability resulting from rapid change need to be managed with a view to long term growth. For a firm to succeed in a dynamic emerging market, the lessons from other firms managing in dynamic emerging industries can be highly instructive. Emerging industries are characterized by a rapid change in terms of the definition of industry, member firms' production function, relation with buyers, suppliers and competitors. This dynamism is in part due to evolutionary changes in technology, knowledge and also is an inevitable outcome of specialization, which allows for faster growth; but results in higher interdependence of firms internationally. Emerging economies will inevitably compete with the members of those new industries; and therefore it may be efficient to learn from the players that are creating and shaping the new competitive structure. RGEs contribute to enhancing technical progress by increasing the rate of invention and innovation, and the speed with which new technology is disseminated and adopted by other firms. Globalization has forced countries to interlink their economies (Armijo, 2008), increasing their interdependence and thus forcing them to react to, and respond to change, accordingly (Hoekman and Porto, 2010). Therefore, emerging economies are facing similar situations to those of RGEs: a changing reality resulting from technological advances and shifts in macroeconomic policies due to internal and external factors such as the dynamics of WTO, Trading Blocs, among others. Given the present need of emerging markets to raise their competitive levels, RGEs are highly-suitable models from which to learn how to cope with and take advantage of the new emerging environments. In this paper we describe RGEs ´characteristics in order to learn about the crucial tasks of managing the complexity of rapid change due to the emergence change. We also explore how the emerging economies can bridge, and even close, the gap with the industrialized economies and whether or not the rapidly-growing enterprises may play an important role. The Characteristics of the Emerging Economies Emerging economies are a group of countries that play an increasingly important role in the global economy. The term "emerging economies" was originally coined by the IFC to describe a fairly narrow list of middle-to-higher income economies as a subset of developing countries. According to Hoskisson, Eden, Lau, and Wright (2000), "emerging economies" are those newly industrializing countries that have adopted market-based policies. Khanna and Palepu (1997: 42) suggest that in defining emerging economies, "the most important criterion is how well an economy helps buyers and sellers come together." They point out that the lack of proper institutions—relative to developed countries—make emerging markets more inefficient and incomplete, whereby information problems, misguided regulation, and inefficient judicial systems hamper communication between buyers and sellers. Bureaucratic judiciary systems, for example, make registration processes lengthier and costlier than in developed economies with a negative impact on transparency and providing fertile ground for favoritism and corruption. Labor markets are frequently highly regulated imposing additional costs on SMEs making them less flexible than otherwise (see Table 1). Table 1: FIRM-SPECIFIC CHARACTERISTICS IN EMERGING ECONOMIES Output marketInput marketLow competitiveness Limited international experienceLiberalization policiesGlobalization Asymmetric access to information & to technologyLimited access to local and international capital marketsPoor dissemination of information related to international marketsLabor marketManagerial constrainsOwnership structureLack of managerial expertiseLack of consulting servicesLack of administrative structureSocial ties between senior managersFamily-owned business Sources: Adopted from Hoskisson et al. (2000), Khanna and Palepu (1997) and Mody (2004)The institutional aspects of the emerging economies Mody (2004) proposes another definition that emphasizes a) a high degree of volatility due to the transitional nature of their economic, political, social, and demographic conditions, b) the inherent trade-offs between flexibility in policy commitments, and c) the transition from transaction-specific to institutional commitments. The idea of a transition from transaction-specific to institutional commitments is appealing in view of the fact that such institutions must also subsume the socio-cultural dimension of the problem. According to North (2005), economic performance depends on institutional heritage, economic rules and, how those rules are devised and enforced, and the specific institutional constraints of each market. In order to reduce rent-seeking, free-riding and morally hazardous behaviors, it is desirable to evolve from a transaction-specifics situation to a rule-based situation, whereby the agents involved in the situation are not relevant to, or cannot influence, the due-process. Having strong and clearly-defined institutions that enhance the performance of firms is a necessary, but not a sufficient, condition to guaranty economic growth. Clague (1996) finds that the characteristics and stability of political regimes have an impact on economic institutions. Similarly, Mauro (1995) argues that bureaucratic and institutional efficiencies are positively correlated with political stability and that poor countries tend to have cumbersome bureaucracy and inefficient institutions. Not only the rules need to be adequate for the circumstances, but also they must be enforced. As North (1990: 107) points out, institutions "are the underlying determinant of the long-run performance of economies". The greater the transparency in terms of information and access to efficient judiciary systems the lowers transaction cost of engaging in productive activities. Artificial national asymmetries and deficiencies, for example, limited governmental support and/or biases in favor of large companies that lobby the government, creates barriers for smaller firms to access to key resources, hence, hindering their competitiveness Characteristics of Rapidly-Growing Enterprises Delmar, Davidson, and Gartner, (2003), Ala-Mutka and Etemad (2006), Fischer and Reuber (2003), Birch, Haggerty, and Parsons (1993) and Keen and Etemad (2011 and 2012) have identified a very interesting group of companies called Gazelles or, in this paper, RGEs. These companies are characterized as smaller firms experiencing explosive growth for a sustained period of time. There are not industry-specific and are found in many industries, ranging from shoes manufacturing, construction to knowledge-intensive and pharmaceutical development. Their main common characteristic is fast growth in revenues, number of employees and revenue per employee. Naturally, this rapid growth in employment and revenues are the consequents of their expansion and further penetration in local and international markets. Most of them internationalize rapidly as well by climbing over international entry barriers effectively. These aspects should be of particular interest to developing economies because of their impact at least in three ways: i) Primary and direct impact. Not only do they generate employment and incremental income but they also increase the total production of goods and service, as well as wealth, in a much shorter period of time than other enterprises. ii) Secondary impact by providing a model to learn from and emulate their action -- the spill-over effects of their success to the rest of the economy would further contributing to the well-being of their region and possibly beyond, otherwise absent (i.e., when normally growing firms are inspired, learn from and emulate local RGEs) iii) Benchmarks for best practices and world-class competitiveness. By aiming to succeed in international markets from the very beginning, these companies need to set their strategic horizons very high adopting the best managerial practices and strategies to achieve the competitive that would enable them to compete internationally at the outset. They tend to select partners, whether suppliers or buyers, that share the same working philosophy and follow similar strategies to complement them. They function collaboratively and interdependently mainly as members of networks as opposed to operating independently. RGEs are in many cases the fundamental core of potential industrial clusters that radiate their momentum to the rest of the economy. They may or may not be a part of a regional industrial cluster; but they actively manage a smaller cluster of their own value net: i.e., an efficient network of buyers and suppliers involved in the both the supply and value chains that collectively generate higher value than their counterparts. This paper will return to the topic or RGEs in the next section. It will present and briefly analyze RGEs in order to examine their main patterns of strategic operations and rapid growth for adoption by the emerging economies to speed-out the transformation of their economic growth and developments. Discussion This discussion builds on the arguments presented earlier and explores the possibility of emerging economies learning from, and emulating, RGES in the developed economies to shorten the time and the path of transformation. In so doing, five broad influential topics will assist in examining different aspect of this examination, as follows. The Need for Re-evaluation and Re-configuration of Advantages In changing environments, property-based assets lose their potency relatively faster than elsewhere. As Miller and Shamsie (1996: 522) observe ¨most competitors will be aware of the value of a rival's property-based resources, and they may even have the knowledge to duplicate these resources¨. However, the knowledge-based resources, more likely to have a higher potentials for generating competitive advantages and growth. Furthermore, the firm has more effective control over the creation and deployment of knowledge–based assets than those of property-based assets. As mentioned earlier, in dynamic environments, firms are forced to gain productivity and meet world-class standards to keep pace with others. A key suggestion of this paper, based on the experience of RGEs, is that without learning and knowledge acquisition to give rise to knowledge-based assets, capabilities and competitiveness, the probability of closing the technological gap and reducing the income inequality will simply not be feasible. Technological gap can be viewed primarily as knowledge gap combined with the lack of process know-how to exploit the technology in a timely manner. Income inequality is in part due to comparatively inefficient of firm operation characterized by their growth rates. In to the case of property-based resources, where competitor may develop the knowledge of how to replicate such resources and thus reduce the competitors' advantage, the traditional barriers (such as legal constraint or historical endowments) did not allow firms to acquire those resources easily. As discussed earlier, those barriers are eroding rapidly. In contrast, knowledge-based resources cannot be easily imitated by firms that do not already posses the requisite know-how. It would be difficult, costly or risky to replicate and time may not favour imitators. As Miller and Shamsie (1996: 522) argue, "knowledge-based resources allow organizations to succeed, not by market control or precluding competition, but by giving firms the skills to adapt their products to market needs and to deal with competitive challenges". Firms in emerging economies will have to learn how to adapt and to respond to international market needs relatively fast to reduce the risk of falling further behind. The relatively static characteristics of the closed-economies, firms were not forced to possess the requisite capabilities to deal with complex situations. Aspiring firms will have to develop collaborative skills to develop and share knowledge to devise new routines and processes to deal with increasing more complex situations. Therefore, the transitional period can be characterized by an ongoing process of unlearning the old routines and the learning the new ones, mainly from more progressive firms such RGEs in order to cope with the new requirements of increasingly more sophisticated demand conditions and tougher competition. The Need for Change in Managers Mindset and the Firm's Out Look. On the one hand, there is a need to understand the implications of the changes in order to develop potentially different courses of action available and how they affect the industry and business practices. On the other hand, according to Weick (1995), the strategic decisions of managers depend on their cognitive structures and how they make sense of the environment. Enterprises need to understand any pending or intended change in a way that "makes sense" to them, fits into some of their interpretative scheme or system of meaning (Bartunek, 1984; Ranson, Hinings, and Greenwood, 1980). When firms face a different environment, such as new international competition, new suppliers and customers, there is a need for a thorough revision because previous symbols, values, and historical attributes may no longer be relevant to the organization that faces the new reality. It is likely that there will be irreconcilable inconsistencies between key labels used in the organization and the key concepts needed for comprehending and dealing with the new reality. The awareness of alternative actions is the key to proper action "in regard to the changes occurring in the data of the markets" (Mises, 1949: 255). Past actions, thinking and experiences that were concretized in norms, standards procedures, and job specifications of the near past need to be revised and in some cases unlearned because they do not reflect the emerging reality anymore. In the entrepreneurial literature, the entrepreneur is the person who has the ability to make the transition possible, to develop new ideas and to set the strategic directions. Firms need to be alert (Kirzner, 1973) to the signal from the markets. The alertness of managers to take advantage of new opportunities and to meet changing market conditions through discovery may be considerably reduced if firms do not change their dominant logic (Prahalad and Bettis, 1986) in order to develop novel strategies. Firms that conducted business for years in a closed economy without much pressure to innovate and to reduce costs, face insurmountable pressures to reinvent themselves. They cannot remain indifferent because their customers will be more demanding, their supply sources will be evolving as well as the competition becoming less forgiving. (continuará en la próxima edición de Letras Internacionales)*Dr. Christian Keen, Coordinador Académico de Finanzas FACS, Universidad ORT Uruguay

This study investigates the existence of political rents in bank lending, using a comprehensive loan-level data set of the universe of commercial loans in Mexico from 2003 to 2012. Identification relies on changes in the state of origin of a senate committee chairman as a source of exogenous variation in firms' political relationship. The study finds that banks offer favorable loan terms to politically connected firms with larger loan quantities, lower loan spreads, longer maturities, and lower collateral requirements. Furthermore, political loans exhibit higher default rates. To isolate the bank supply channel, a rich set of fixed-effects is included with various specifications. The favorable lending increases with the strength of a firm's political connection, varies gradually along the political cycle, and is mainly offered by large and domestic banks. Consistent with the quid pro quo hypothesis, the study finds that banks that extend political loans receive significantly more government borrowings with better credit quality. The study also shows that the greater credit supply due to political connection leads to a large and significant increase in firm-level employment and assets. The study provides estimates of the total social cost of political lending and net revenue for banks that are engaged in rent provision activity. Finally, a series of robustness tests are performed to rule out alternative mechanisms and explanations.

Kenya's textile and apparel sector has the potential to play a key role in anchoring the country's deeper movement into middle income status and in serving as a source of gainful employment for its fast growing, young population. As a manufactured good, it offers opportunities for increased value capture and streamlined trade logistics and for the building of skills and experience from the factory floor to management level. Based on these foundations, it therefore serves as a potential gateway to other manufactured goods, offering opportunities for Kenya to capture an increasing share of global trade and to advance economic diversification. The report is structured as follows: chapter two describes global and regional market trends in textile and apparel. Chapter three reviews the evolution, growth, and performance of the apparel sector in Kenya and then analyzes the sector in terms of markets, products, and stakeholders. Chapter four focuses on Kenya's performance in terms of relevant macro indicators and highlights the critical constraints faced by apparel manufacturers and exporters in Kenya. Chapter five concludes with recommendations. Where possible, chapters end with a summary of key points and conclusions.

This document presents the Systematic Country Diagnosis (SCD) for Mali. The SCD was prepared following a consultative process within and outside the World Bank. It identifies constraints and opportunities for achieving the twin goals of ending poverty and improving shared prosperity by 2030 while acknowledging (i) the need for selectivity in pro-poor interventions, and (ii) the many competing 'binding' reasons for poverty in Mali. The objectives of the twin goals are similar for Mali as the incidence of dollar-a-day poverty exceeds 40 percent of the population. Selectivity means the identification of principal opportunities for poverty reduction in the next 15 years, as well as the identification of binding constraints to reaping such opportunities. In the search for selectivity, there is the risk of not identifying the correct set of opportunities and constraints. However, the risk of not being selective would probably have more serious implications as it could lead the government and its development partners to disperse their resources and attention too thinly over too many competing priorities. Selectivity also implies making trade-offs between immediate and longer term objectives. In this document priority is given to the identification of poverty reduction opportunities which could deliver results before 2030, while acknowledging that efforts should not undermine the prospects for poverty reduction and shared prosperity beyond 2030. In this regard, particular attention is paid to environmental and fiscal sustainability.

This note lays out the rationale for including land administration quality index in the standard 'registering property' indicator by doing business and discusses initial evidence from the global sample, showing that many countries, including some that have performed well on Doing Business's traditional ranking, have a long way to go to establish a system of land administration that is reliable and transparent, achieves sufficient coverage, and minimizes disputes. The cases in this brochure document that by smartly deploying new technology, countries can make progress in this direction irrespective of their initial income level. Continued monitoring and learning from experience at all levels had an important role in facilitating such progress. Doing Business will contribute to this agenda by elevating the profile of land governance, tracking countries' performance with respect to land administration quality index, and fostering global exchange and learning from good performers.

A new coalition government was formed in September 2012 following the collapse of the previous government at the end of August 2012. The Kyrgyz economy experienced a significant decline during the first half of 2012 caused by disrupted operations at the Kumtor gold mine. A decline in gold exports combined with a higher level of imports has increased the current account deficit. Expansionary fiscal policy during the first half of the year along with revenue weakness during the remainder of the year will widen the fiscal deficit to 6.1 percent of gross domestic product (GDP) in 2012 from 4.8 percent of GDP a year ago. The medium-term growth outlook is favorable although there are significant downside risks. There are also exogenous shocks that will need to be mitigated, including rising food prices, spillover effects from the Euro zone sovereign debt crisis, and a weak global economy.

The World Bank commissioned this report as part of a set of studies concerned with the Uganda Demobilization and Reintegration Program and the Amnesty Commission. The study represents one element of the set of studies which included the Final Independent Evaluation of the Uganda Emergency Demobilization and Reintegration Project (UgDRP), Reporter Reintegration Survey and Community Dynamics Survey, and a study on the relationship between the Amnesty Commission and its DDR Implementing Partners study. The background field work and research for this study was integrated into the overall background research and fieldwork for the set of studies. In this study the focus of the analysis is on processes of reintegration rather than the achievement of a static marker of reintegration. In other words rather than examining the experience of reporters to identify the ones who are reintegrated and the ones who are not, the study examines the complex interplay of elements in the process of social and economic reintegration to identify which drivers have most influenced (positively and negatively) the reintegration process in which reporters are and have been engaged. The study identifies the drivers of successful or unsuccessful reintegration and the crosscutting dynamics such as gender, tradition, poverty and economic markets that exacerbate the impact of drivers of reintegration on the lives of reporters and communities. The report presents actionable findings that can inform future programming in the area. The overall purpose of the study is to provide an analysis of the drivers of reintegration and to identify the distinguishing features of successful reintegration amongst reporters.

This policy paper is motivated by the Government's 'Pakistan: framework for Economic Growth (FEG) 2011' which places weak corporate governance at the top of the 'software' constraints to growth. The efforts to reform the State-Owned Enterprises (SOEs) have stalled in Pakistan for almost five years with significant negative implications not only in terms of fiscal losses, but also deteriorated and cost-ineffective service delivery. The paper suggests a number of urgent policy measures designed to improve the efficiency and effectiveness of SOEs. These include basic governance reforms, revamped commercialization processes and enhanced market regulations. The paper also provides some perspectives on international experience on SOE reforms combined with some suggestions on how the Government can move forward.

These organizations have joined together to recommend the principles presented below. The document concludes with anticipated next steps, which point toward a toolkit of best practices, guidelines, governance frameworks, and possibly codes of practice by the major sets of private actors.

This report addresses the fact that natural disasters have caused vast social upheaval and economic damage to Armenia. This ongoing vulnerability to natural disasters has led Armenia to appreciate the advantages of developing a comprehensive strategy to help minimize ensuing fiscal exposure because the national budget will never be adequate to mitigate, respond, and recover from these recurrent but unavoidable crises. Since the Spitak earthquake, Government has reorganized its emergency management system and established many seismic mitigation activities and created a Ministry of Emergency Situations (MoES) and established a cabinet-level Minister responsible for disaster response. Government may wish to build on these achievements. The report is also based on a study carried out in Armenia under the Global Facility for Disaster Reduction and Recovery (GFDRR) project, which analyzed disaster risks, assessed existing systems, mechanisms, and institutional capacities, and made recommendations for developing a comprehensive national disaster reduction and preparedness agenda, which could form the basis for a natural disaster reduction project.

Since 2004 (Ethiopian Fiscal Year (EFY) 1997), Ethiopia has experienced strong and generally broad-based real economic growth of around 10.6 percent on average between then and 2011. Growth over the last nine years was far beyond the growth rates recorded in aggregate terms for Sub-Saharan Africa (SSA), which on average only reached 5.2 percent, less than half of Ethiopia's average real gross domestic product (GDP) growth rate during that period. Inspired by the East Asian experiences for a comparison of selected indicators and policies of Ethiopia and China/Korea), growth was induced through a mix of factors including agricultural modernization, the development of new export sectors, strong global commodity demand, and government-led development investments. The initial double digits growth rates have now manifested slightly lower but remain at high single-digit levels. The economy is expected to stabilize at around seven to eight percent in 2012, largely owing to improved performance in the agriculture sector. GDP growth is likely to stay around that margin up until 2016 (EFY 2008) driven by rising foreign investment and exports (Economist Intelligence Unit 2012). High inflation persists, but is on a slightly decreasing trend. Economic growth brought with it positive trends in reducing poverty, in both urban and rural areas. Ethiopia follows a strategy of increasing exports to facilitate growth. This is appropriate given the currently limited size of its domestic market and it is consistent with the development experience of some of the recently successful countries, particularly in East Asia. Export of goods growth is to a good extent driven by volume growth across a variety of product groups, which indicates that this growth is a result of recent efforts to increase and diversify the export base. Overall export and import developments result in a significantly increased trade deficit by 43 percent, up from US$5.5 billion in 2010/11 to US$7.9 billion.

Doing business in India 2009 is the first country specific subnational report of the doing business series that measures business regulations and their enforcement across India. Doing business in India 2009 covers 10 out of the 12 previously measured cities, and documents their progress. It adds 7 new locations, expanding the study to 17 locations. Comparisons with the rest of the world are based on the indicators in doing business 2009. The indicators in doing business in India 2009 are also comparable with the data in other subnational and regional doing business reports. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. Other areas that significantly affect business, such as a country's proximity to markets, the quality of infrastructure services (other than services related to the trading across borders indicator), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions, or the underlying strength of institutions, are not directly studied by doing business.

This overview summarizes the key findings of the eight chapters and one policy note. It is organized as follows. The first section provides a background of Guangdong, while the second describes the current situation of inequality in the province. Next is a discussion of the potential impacts of the transfer of industrial activities ('industrial transfer') in mitigating regional disparity, followed by the recommendation of a three pillar strategy for Guangdong. The fifth section focuses on the elimination of absolute poverty through the minimum living allowance (Dibao) system, and the sixth turns to policy actions needed to increase opportunities for the rural population by moving them to jobs, increasing their access to finance, and ensuring that their land rights are better protected. The seventh section further assesses Guangdong's options for investing in people through more equitable service delivery in compulsory education, skill development, and health care, with the aim of enhancing the capacity of the poor to seize and utilize opportunities. The last section concludes this overview.