Entrepreneurship is a fundamental driver of growth, development, and job creation. While Latin America and the Caribbean has a wealth of entrepreneurs, firms in the region, compared to those in other regions, are small in size and less likely to grow or innovate. Productivity growth has remained lackluster for decades, including during the recent commodity boom. Enhancing the creation of good jobs and accelerating productivity growth in the region will require dynamic entrepreneurs. This book studies the landscape of entrepreneurship in Latin America and the Caribbean. Utilizing new datasets that cover issues such as firm creation, firm dynamics, export decisions, and the behavior of multinational corporations, the book synthesizes the results of a comprehensive analysis of the status, prospects, and challenges of entrepreneurship in the region. Useful tools and information are provided to help policy makers and practitioners identify policy areas governments can explore to enhance innovation and encourage high-growth, transformational entrepreneurship.

Table of Contents:
Overview: Human decision making and development policy • Three principles of human decision making • Psychological and social perspectives on policy • The work of development professionals • References Part 1: An expanded understanding of human behavior for economic development: A conceptual framework Introduction Chapter 1: Thinking automatically • Two systems of thinking • Biases in assessing information • Biases in assessing value • Choice architecture • Overcoming intention-action divides • Conclusion • Notes • References Chapter 2: Thinking socially • Social preferences and their implications • The influence of social networks on individual decision making • The role of social norms in individual decision making • Conclusion • Notes • References Spotlight 1: When corruption is the norm Chapter 3: Thinking with mental models • Where mental models come from and why they matter • How mental models work and how we use them • The roots of mental models • The effects of making an identity salient • The staying power of mental models • Policies to improve the match of mental models with a decision context • Conclusion • Notes • References Spotlight 2: Entertainment education Part 2: Psychological and social perspectives on policy Chapter 4: Poverty • Poverty consumes cognitive resources • Poverty creates poor frames • Social contexts of poverty can generate their own taxes • Implications for the design of antipoverty policies and programs • Looking ahead • References Spotlight 3: How well do we understand the contexts of poverty? Chapter 5: Early childhood development • Richer and poorer children differ greatly in school readiness • Children need multiple cognitive and noncognitive skills to succeed in school • Poverty in infancy and early childhood can impede early brain development • Parents are crucial in supporting the development of children’s capacities for learning • Parents’ beliefs and caregiving practices differ across groups, with consequences for children’s developmental outcomes • Designing interventions that focus on and improve parental competence • Conclusion • Notes • References Chapter 6: Household finance • The human decision maker in finance • Policies to improve the quality of household financial decisions • Conclusion • Notes • References Chapter 7: Productivity • Improving effort among employees • Recruiting high-performance employees • Improving the performance of small businesses • Increasing technology adoption in agriculture • Using these insights in policy design • Notes • References Spotlight 4: Using ethnography to understand the workplace Chapter 8: Health • Changing health behaviors in the face of psychological biases and social influences • Psychological and social approaches to changing health behavior • Improving follow-through and habit formation • Encouraging health care providers to do the right things for others • Conclusion • Notes • References Chapter 9: Climate change • Cognitive obstacles inhibit action on climate change • Psychological and social insights for motivating conservation • Conclusion • Notes • References Spotlight 5: Promoting water conservation in Colombia Part 3: Improving the work of development professionals Chapter 10: The biases of development professionals • Complexity • Confirmation bias • Sunk cost bias • The effects of context on judgment and decision making • Conclusion • Notes • References Chapter 11: Adaptive design, adaptive interventions • Diagnosing psychological and social obstacles • Designing an intervention • Experimenting during implementation • Conclusion: Learning and adapting • References Spotlight 6: Why should governments shape individual choices? Index