Friday, July 01, 2005
SME Issues and Policies: Dispute Resolution, Procurement and Regulation
By: Paul Holden and Jennifer Sobotka, The Enterprise Research Institute, 1999
This paper outlines some of the issues that affect small and medium sized enterprises (SMEs) in three areas; regulation, procurement, and dispute resolution. There are obviously many other factors which also influence the ability of entrepreneurs to establish and expand small businesses. Financial sector issues, education, training, information dissemination, property rights, infrastructure, technology and export issues all have an important impact on SMEs. This paper is the first step of a more comprehensive review of how Inter-American Development Bank loans, programs and policies affect small businesses over a broad range of issues.
The paper commences with a brief rationale for focusing on SME issues followed by sections on regulation, procurement and dispute resolution. The conclusion summarizes briefly the main points of the paper and highlights the need for an integrated approach if SMEs are to be helped effectively. Where appropriate, it adopts a transactions costs approach by examining how these issues affect the cost of doing business. A review of recent Bank loans reveals that many involve themes that potentially affect SMEs. As a result, there is the potential to incorporate explicitly small business issues in many projects. Therefore, at the end of each section there is a checklist of topics that could be addressed by those interested in incorporating SME components into Bank loans. Integrating the topics on the checklists into future Bank projects and obtaining more data on SME specific questions will go a long way toward incorporating the needs of SMEs into the Bank’s body of work.
This paper outlines some of the issues that affect small and medium sized enterprises (SMEs) in three areas; regulation, procurement, and dispute resolution. There are obviously many other factors which also influence the ability of entrepreneurs to establish and expand small businesses. Financial sector issues, education, training, information dissemination, property rights, infrastructure, technology and export issues all have an important impact on SMEs. This paper is the first step of a more comprehensive review of how Inter-American Development Bank loans, programs and policies affect small businesses over a broad range of issues.
The paper commences with a brief rationale for focusing on SME issues followed by sections on regulation, procurement and dispute resolution. The conclusion summarizes briefly the main points of the paper and highlights the need for an integrated approach if SMEs are to be helped effectively. Where appropriate, it adopts a transactions costs approach by examining how these issues affect the cost of doing business. A review of recent Bank loans reveals that many involve themes that potentially affect SMEs. As a result, there is the potential to incorporate explicitly small business issues in many projects. Therefore, at the end of each section there is a checklist of topics that could be addressed by those interested in incorporating SME components into Bank loans. Integrating the topics on the checklists into future Bank projects and obtaining more data on SME specific questions will go a long way toward incorporating the needs of SMEs into the Bank’s body of work.