Diversified business groups (DBGs) have played an important role in industrialisation in developing countries, and they continue to have an impact on economic growth, including through their reinvestment of rents in productive or non- productive activities. DBGs, like the private sector more broadly, can be enablers of structural change or obstacles to efficient industrialisation. Despite this, there is surprisingly little information available on DBGs in developing countries, including in corporate literature.
To help fill this gap, the Anti-Corruption Evidence (ACE) research consortium has carried out the first comprehensive review of DBGs in Tanzania, using a framework of ‘regimes of capital accumulation’ (RCAs) (Andreoni and Sial, 2020). This framework draws on three strands of literature – theories of business group diversification, regulation theory, and political settlements. Bringing the political settlements approach into the analysis is particularly important because it helps explain the two-way relationship between businesses and policies and institutions, as mediated by the relative power of different organisations (the ‘political settlement’).
Read the Working Paper.