Can managers boost development?


Published 25.09.19
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Why a country is rich or poor may be explained by the quality of its managers. Can better management practices improve firm productivity?

Managing people – how you hire, pay, promote, evaluate, and train them – is important for productivity. Other aspects of management, such as how data are collected, how systems are monitored, and whether sensible goals are set, can also help improve firm efficiency. John Van Reenen discusses how an evaluation of firm management in 34 countries around the world, both rich and poor, revealed that better managed firms are more productive and profitable, pay workers better, and are more likely to survive and grow. Increasing firm competition also allows better managed firms to grow. The findings explain about a third of the differences in the wealth of nations.

Editors' note: This video is based on this PEDL project.