 | Private Sector Development in Low-Income Countries - Development in Practice (WB, 1996, 188 p.) |
 |  | (introduction...) |
| | Foreword |
| | Acknowledgments |
| | Acronyms and abbreviations |
| | Definitions and data notes |
| | Overview |
|  | Chapter 1-From state to market uneven progress |
| | (introduction...) |
| | Recent policy reforms |
| | Fast and slow growers |
| | The drag of public |
| | Regulation and barriers to competition a harsh business environment |
| | Poor quality of physical infrastructure and human resources |
| | The reform agenda |
| | Chapter 2-Establishing an attractive business environment agile firms, agile institutions |
| | (introduction...) |
| | The private sector's assessment of the business environment |
| | Foundations of a dynamic private sector |
| | Secure, flexible transactions |
| | Competition-and simplified regulation |
| | Enterprise development |
| | Efficient infrastructure |
| | The agenda for developing an attractive yet competitive business environment |
| | Chapter 3-Reforming public enterprise farther performing and faster |
| | (introduction...) |
| | Public enterprises are not performing well |
| | Turning to the private sector—slowly |
| | The way forward—farther and faster |
| | Chapter 4-Building robust financial systems— difficult but pressing |
| | (introduction...) |
| | What went wrong? |
| | What has been done? |
| | What remains to be done? |
| | The path for reform |
| | Selected bibliography |
What went wrong?
Interventionist policies of the past crippled the fledgling financial systems of many low-income countries, including most of those in Sub-Saharan Africa. Large budget deficits were monetized, and inflation followed. To keep nominal rates from rising, interest rates were controlled. But the resulting reduction in real rates reduced incentives for the formal banking system to intermediate savings. It also fostered capital flight and encouraged enterprises with access to credit to overborrow. Inefficient public enterprises grew at the expense of the more efficient private sector. Many commercial banks were nationalized. Credit was allocated by government decree. And banks lost their ability to screen and assess credit risks. Central barking and oversight withered to the detriment of the banking system. Bad loans accumulated, and the losses were periodically recognized and monetized—adding to the bouts of inflation and the unpredictability of the economic environment. This situation has left most low-income countries ill-equipped to generate the private supply response to structural reforms.
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