Patricio Dalton
(Tilburg University)
will give a presentation on
Developing Goals for Development: Experimental Evidence from Cassava Processors in Ghana
Abstract:
We train a random sample of small informal Ghanaian cassava processors on two simple practices: production measurement and goal setting. The former is essential for any firm to survive, let alone grow. The latter is an ubiquitous practice in the western world and a proven method to enhance productivity. Despite their importance, these practices are not systematically used by small informal firms in the developing world. While neither practice requires substantial material resources to be implemented, both may require a change in mind-set and deep-rooted norms. We follow the cassava processors for two months after training, and collect daily data on production and goals. We find a significant positive effect of goal-setting on productivity. Firms trained in goal-setting increase their productivity by 50% relative to those trained in production measurement only. In particular, male employers and employers who are less well-educated, with less experience in goal-setting, with smaller firms, and who are more impatient and more risk-averse set higher goals. Finally, we observe that, on average, workers systematically underachieve their daily production targets to a moderate extent, which suggests that goals are kept rather high as a motivational device. All in all, we confirm that goal setting can be an elective and inexpensive tool to increase productivity amongst small informal enterprises in non-western cultures.