The Effectiveness of Microenterprise Policies in Chile: The Case of Entrepreneurship Center – ChileCompra

Abstract

Microenterprise support programs (MESP) have gained popularity as a modern development policy starting in the 1980s, with an increasing number of countries adopting this strategy to enhance economic growth. However, few studies examine the effectiveness of these programs. This paper will evaluate one of these programs, Centros de Emprendimiento ChileCompra in Chile. This initiative consists of centers that provide training to entrepreneurs in business plan development, financing, and taxation to enable greater participation amongst microenterprises in the public procurement market. Using eight years of panel data on program contracts, we assess the impact of ChileCompra’s microenterprise participation component with regards to the share of the total business and the share of revenues. Initial results indicate that the program resulted in an increased share of contracts going to microenterprises at the national level, but that at the local level that results were uneven. In many cases, contrary to the policy’s goals, the share of microenterprises receiving contracts through ChileCompra declined substantially.

Keywords: SME, Microenterprise, Program Evaluation, Government Procurement

JEL Classification: H70, L53, D04