Need of a Balance between Fragmented and Coordinated Decision-Making

Abstract

This chapter looks at fragmentation and implications in different decision-making contexts with a focus on new technology and enterprise creation in developing economies. Coordination is introduced as the response to external effects of fragmented and scattered decisions. The most important features of this framework are captured under a simplified theoretical economic model. The evidence on economic sectors is provided in the literature review, but the data from “Doing Business” of the World Bank is used to test for the high costs implied by the implicit scattering and fragmentation of decisions related to enterprise creation. The attained results either from access to new technologies or from the empirical analysis of “Doing Business” data show the prevalence of anti-commons and fragmentation in developing economies. This points out how anti-commons and fragmentation can limit development through reducing business expansion and social benefits, even when national and international institutions exhibit clear intentions for coordination.