Public policy and impact evaluation of micro-enterprises in Costa Rica : the case of the National Program of Support to Small and Medium Enterprises (PRONAMYPE).

Abstract

This thesis makes an in-depth evaluation of National Program of Support to Small and Medium Enterprises (PRONAMYPE. Since 1992, this program is attached to the Ministry of Labor and Social Security of Costa Rica and it has been the most important state investment fund aimed at financing micro enterprises, hence, it is currently integrated on the axis of social welfare of the National Development Plan (NDP). The research problem is “to what extent PRONAMYPE, as an instrument of public employment policy, fulfills its objective of promoting employability and human capital of the workforce of micro and small enterprises of population in vulnerability and poverty?”. The methodological strategy is based on a mixed sequential explanatory method, where the dominant core was a quasi-experiment complemented by a strong qualitative component. Social Network Analysis was used for the evaluation of the context of the program. The empirical results are structured according to the theoretical-methodological logic of the CEval approach. Thus, the first part analyzes the external and internal context of the Program, while the second part focuses on the impact assessment according to the indicators of the statistical model and related qualitative data. In the External-Institutional Subsystem, the research found coherence between the objectives of the Program and those expressed by sectoral policy, nevertheless, PRONAMYPE’s place in the microfinance ecosystem is marginal, which reduces its incidence within microcredit sector and target population. Regarding the Internal Process Subsystem, the intervention was characterized by a complex execution and interannual inconsistent management. At the level of the Dimension Behaviour, the program achieved contradictory and statistically not significant impacts in the attended entrepreneurships, but qualitatively relevant effects in relation with the socio and familiar sphere and its basic needs. Overall evidence leads to affirm that the intervention does not fulfill the purpose of reducing inequality and promoting upward social mobility, which emphasizes the need for the program to achieve a comprehensive understanding of its intervention problem. Likewise, it is concluded that the public policy to promote microfinance for poverty reduction, it is not a matter that should be related solely to the existence of income distribution mechanisms (interventions) but is determined by quality of policy design and the need for a better execution under an inter-institutional care approach. Since public policy is an element of public scrutiny, the interventions and the stakeholders involved require greater analysis, support and control over their implementation. Structurally, the reflection on public policies and their essential role in social welfare, it is related to the (re) structuring of the State and its loss of capacity to meet the demands and needs of the population of the first and second quintile of national income. Therefore, this research represents a contribution to the understanding of the current opacity of the analyzed public action, because provides scientific information based on evidence to support the discussion oriented towards that necessary change of model and implementation of the NDP.