**Malawi (MWI).** Malawi is ranked 20th in per capita GDP terms and 22nd in terms of ACR (2007). The econometric evidence shows that the aggregate productivity of Malawian’s manufacturing firms are dramatically affected by infrastructure quality (83 percent of average log TFP). Delays in clearing customs while importing account for 25 percent of the average log productivity. A 20 percent improvement in this variable could increase the average productivity by 6 percent and the allocative efficiency by 1.5 percent (see panels D and E of figure 6.11). Symmetrically, productivity decreases as the number of power outages increases; the percentage contribution of this variable to average log productivity is 9.2 percent and to the allocative efficiency is 3.5 percent. The cost of electricity from firms’ own generators is another antiproductive factor. Water provision also impacts the productivity of Malawian firms (figure 6.11).

**Madagascar (MDG).** Madagascar is ranked 21st in per capita GDP terms, and 16th and 17th in terms of demeaned aggregate productivity and DBR (2007), respectively. How infrastructure may impact firm-level productivity is clear from the results obtained in figure 6.10. The factors related to electricity supply are intimately linked to productivity. Water costs and the number of phone outages also reduce productivity at the firm level. The total contribution of infrastructure to average log productivity in Madagascar is 31 percent and to allocative efficiency is 28 percent.

**Ethiopia (ETH).** Ethiopia is ranked 22nd in terms of per capita GDP and 21st in terms of firms’ perceptions. The productivity of Ethiopian manufacturing firms is negatively affected by the days to clear customs to import, the cost of electricity from the public grid, shipment losses while in transit, and the percentage of supplies that are of lower than agreed-upon quality. Positive effects on productivity come from the percentage of electricity from firms’ own generators and from the days of inventory of the main supply. These results are common to Eritrea since the countries are pooled together for estimation. The largest contribution to the average log productivity is by the days of inventory of main supply, days to clear customs to import, the cost of electricity from the public grid, and the electricity from firms’ own generators (figure 6.8). In total, infrastructure represents 32 percent of average log TFP, which seems too low. This might indicate that pooling with Eritrea for estimation of IC elasticities might not be a good idea in this case.

**Eritrea (ERI).** Eritrea is the last country in the ranking, in 23rd position in terms of per capita GDP. The total number of days waiting to clear customs to import, the cost of electricity from the public grid, shipment losses, and low-quality supplies are the factors with negative effects on firms’ productivity (see figure 6.7). Remember that these results are common to Ethiopia since the countries are pooled together for estimation. The cost of energy from the public grid accounts for a 22.9 percent of average log productivity, almost 50 percent more than the second factor (days to clear customs to export) in order of importance. In total, infrastructure represents 48 percent of average log TFP.

# **6.2 Summary of the main empirical results**

The aim of this subsection is to summarize the main empirical results obtained, country by country, including the absolute percentage contribution of the infrastructure group of variables to the sample 59