Investment Decisions of Small Entrepreneurs in a Context of Strong Sharing Norms

Event Type
Public Lecture

Location / Date
Bonn, 08.03.2013

Deutsches Institut für Entwicklungspolitik (DIE)

Michael Grimm (International Institute of Social Science, Erasmus University Rotterdam) presented his recent research on investment decisions of small entrepreneurs in Burkina Faso, followed by a discussion.

Traditional societies, and in particular those in Sub-Saharan Africa are often characterized by strong sharing obligations. Although complying with such obligations can imply insurance against household and business-related shocks, it requires to forgo profitable investments and hence long term growth. Michael Grimm and his fellow researchers suggest that there are two behavioral patterns: complying with sharing norms and staying small or stepping out of the solidarity network, investing and becoming big. The provision of formal insurance may contribute to long term growth by softening sharing obligations.

For further information please contact Axel Berger.

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