Business Environment and Comparative Advantage in Africa: Evidence from the Investment Climate Data

This paper ties together the macroeconomic and microeconomic evidence on the competitiveness of African manufacturing sectors. Africa’s difficult business
climate, and the tendency to overcome this by working in ethnic networks, slows new entry and may decrease the incentives of key parts of the business community for creating an aggressive pressure group for reform. This slows their impact and raises the possibility that countries settle into a low-productivity equilibrium.