After the 2008 financial crisis the level of convergence between middle- and high-income countries slowed down. As a result, challenges faced by policymakers in emerging countries are becoming increasingly complex, and therefore requires further understanding of structural reforms in middle-income countries. This Capstone project compiled a database of case studies by selecting and evaluating reforms in three key sectors: Micro, Small, and Medium Enterprises (MSMEs), urban transportation, and in green growth.
The findings of MSMEs’ section showed that MSMEs’ participation in Global Value Chains (GVC) ensures the sustainable and inclusive growth of the economies. For example, SME transactions in Australia increased by 60% after government-owned EFIC has shifted its focus to MSMEs and their access to GVC in 2014. In the case of Kazakhstan, the findings suggested that in the context of a commodity dependent economy in transition, FDI reforms are productive in developing the SME through the created supply chain.
For urban transportation, the Capstone team focused on Bus Rapid Transit (BRT) system and its implementation in 19 urban cities. The team found that the adoption of the BRT system, TransMilenio in Bogotá, Colombia, allowed for a decrease of average travel, reduced pollution, traffic and congestion in the TransMilenio corridors, and resolved the delicate political economy issues. However, it created some negative spillovers due to the relocation of the routes and buses.
Lastly, the team analyzed reforms in the green growth sector in Portugal, the Republic of Korea, and Chile. Their research suggested strong connections between economic performance and energy independence and efficiency. For instance, Portugal’s reform points to a positive correlation between renewable energy generation and electricity prices and a negative correlation between renewable energy generation and energy intensity.