Poor management has long been suspected as a major constraint on job creation in the manufacturing sector in low-income countries. In this sector, numerous micro and small enterprises in industrial clusters account for a large share of employment. This paper examines the roles of industrial...

In industrial clusters, transaction costs are kept low and free riding is discouraged by a community mechanism developed through dense and repeated interactions among entrepreneurs. In such environments, new entrants without established reputations and connections are put at a distinct...

The need to construct an effective strategy for industrial development in low-income countries has been largely ignored by development economists because industrial policies have failed in many developing countries. This does not imply, however, that industrial development cannot be promoted....