Barriers to Enterprise Development in the Caribbean

Caribbean economies have suffered from stagnant growth since the 1990s. This can be a feature of small developing economies and is a major concern for policy-makers. In this paper, we examine establishment-level data to gain a better understanding of the factors that constrain the growth of businesses in the region. In addition to documenting broad differences in obstacles to business within and across the region, we particularly focus on the main obstacles affecting small and medium-sized firms. The econometric analysis highlights three main barriers at a regional level: an inadequately educated workforce; access to finance; and crime, theft and disorder. However, there are variations at the country level and the analysis indicates clusters of countries that experience obstacles to similar degrees. The paper concludes with recommendations for alleviating the constraints to enterprise development and in stimulating economic growth.