Entrepreneurs hold the key to income growth in developing economies

New research center will suggest policy solutions based on massive survey data

By moving from agriculture to business, villagers in Thailand have improved their incomes. Click here for more information.

The John Templeton Foundation has provided a $3.3 million grant for a new project to focus on wealth creation and poverty reduction in developing countries by bringing together some of the nation’s leading economists and scholars to form The Enterprise Initiative, based at the University of Chicago.

University scholars will join researchers at the Massachusetts Institute of Technology’s Poverty Action Lab and Yale’s Economic Growth Center.

The researchers will assemble data and develop high-quality models that will focus on the role of enterprise and simulate the impact of various alternative polices, according to project director Robert Townsend, the Charles E. Merriam Professor of Economics and the College at the University of Chicago. The new models will evaluate the choice of occupation, education and access to credit and insurance at the household levels, and simulate the impact on growth, inequality and poverty reduction at the regional and national levels.

“This project will help us explain the story behind successful enterprise and its impact,” Townsend said. “Traditionally, economic research has been divided in its approaches and fields. We will seek to integrate subfields and promote a more holistic approach to looking at development.” He termed the approach “applied general equilibrium enterprise economics.”