Cooperativismo y Desarrollo, January-April 2019; 7(1): 129-144
Translated from the original in Spanish
Gaps in the application of Ecuadorian public policies and their relationship with small and medium enterprises
Vacíos en la aplicación de políticas públicas ecuatorianas y su relación con las pequeñas y medianas empresas
Diana Victoria Marcillo Parrales1, Osvaldo Domínguez Junco2
1Universidad Estatal del Sur de Manabí. Ecuador. Email: victoria.marcillo@unesum.edu.ec
2Universidad de Pinar del Río "Hermanos Saíz Montes de Oca". Cuba. Email: osvaldodj@upr.edu.cu
Received: June 6th, 2018.
Accepted: January 22nd, 2019.
ABSTRACT
The autonomous decentralized governments of the cantons of Ecuador, as established by the Organic Code of Territorial Organization, Autonomy and Decentralization, are able to generate their own territorial policies. Public administrators, depending on compliance with the goals of economic reactivation and the internal market, must manage development programs in terms of growth in production and microenterprises. Public policies are an instrument that is used in the administrations of public bodies to achieve economic and social growth. The present research, carried out in the canton Jipijapa of Manabí Province in the Republic of Ecuador, allowed to determine the importance and impact that the public policies have in the development of the small and medium enterprises through the analytical descriptive method with a bibliographical revision from the theoretical approach. It identifies some of the existing public policies of a productive nature and their relationship with small and medium-sized enterprises. Their applicability and evaluation were analyzed with the efficiency, effectiveness and effectiveness indicators, a diagnosis was made applying surveys in microenterprises identified as object of study, and interviews with the political authorities of each decentralized autonomous government that make up or are part of the Jipijapa canton. To validate the results, statistical software Statistical Package for the Social Sciences (SPSS) version 22.0 was used. The existence of gaps that prevent the correct application of public policies and development programs was determined.
Keywords: public policies; micro-enterprises; administration; autonomous governments; local development.
RESUMEN
Los gobiernos autónomos descentralizados de los cantones del Ecuador, según lo establece el Código Orgánico de Ordenamiento Territorial Autonomía y Descentralización, están en capacidad de generar sus propias políticas territoriales. Los administradores públicos, en función del cumplimiento de las metas de reactivación económica y del mercado interno, deben gestionar programas de desarrollo en términos de crecimiento de la producción y de las microempresas. Las políticas públicas son un instrumento que se emplea en las administraciones de los organismos públicos para alcanzar el crecimiento económico y social. La presente investigación, realizada en el cantón Jipijapa de la Provincia de Manabí en la República del Ecuador, permitió determinar la importancia e impacto que tienen las políticas públicas en el desarrollo de las pequeñas y medianas empresas, a través del método descriptivo-analítico, con una revisión bibliográfica desde el enfoque teórico. Se identifican algunas de las políticas públicas de índole productiva existentes y su relación con las pequeñas y medianas empresas. Se analizó su aplicabilidad y valoración con los indicadores de eficiencia, eficacia y efectividad, se realizó un diagnóstico aplicando encuestas en las microempresas identificadas como objeto de estudio y entrevistas a las autoridades políticas de cada gobierno autónomo descentralizado que conforman o son parte del cantón Jipijapa. Para validar los resultados se empleó el software estadístico Statistical Package for the Social Sciences, versión 22.0. Se determinó la existencia de vacíos que impiden la correcta aplicación de políticas públicas y programas de desarrollo.
Palabras claves: políticas públicas; microempresas; administración; gobiernos autónomos; desarrollo local.
INTRODUCTION
Public policies are the result of the interaction between a cognitive process (world view, ideas), a defence or promotion of particular interests or groups and the influence of both formal institutions (the State, public administration, trade unions, etc.) and informal institutions (culture, the market, etc.) (Secretaría Desarrollo Económico, 2009).
Small and medium enterprises are an economic unit of production and decision that through the organization and coordination of a series of factors (capital and work), seeks to make a profit by producing and marketing products or providing services in the market (Andersen, 1999).
Local development is the set of economic, social, cultural, political and territorial processes through which a community, on the basis of its own potential and the opportunities offered by the environment, has access to well-being, without exclusion or discrimination, and guarantees the conditions for future generations to do so (Carvajal Burbano, 2011).
In Ecuador, the boom in microenterprises occurred during the 1990s due to the increase in underemployment and unemployment caused by the crisis of the 1980s. Most of them were constituted without planning programs and with high interest rates, causing the Ecuadorian State to look for alternatives that would maximize the advantages. Thus, in 1992, the Ministry of Foreign Trade (MICIP) created the National Chamber of Microenterprises (CNM), as a grouping organization of formal and informal microenterprises, microentrepreneurs with microcapitals throughout the national territory, organized in cantonal chambers, parishes, federations and sector-based organizations of microenterprises (López, 2015).
Ecuador is a potentially productive country, among its main natural resources are: mining, marine resources, aquaculture resources and fertile lands for production. The aforementioned aspects project it as a state that with a well-managed development model would generate a growing economy; however, the inadequate exploitation of its natural resources by businessmen and industries creates, each time, an environment of greater economic and social disadvantages within the population.
La población rural es el sector que directamente se ve perjudicado al carecer de los recursos humanos, técnicos y los conocimientos necesarios para una producción eficiente. La inherencia gubernamental en la última década, la carencia de políticas de crecimiento empresarial, junto con la mala administración de los gobiernos de turno crean un escenario poco motivante para la iniciativa microempresarial, donde los proyectos de inversión por parte de instituciones privadas, públicas, estatales e internacionales, en la mayoría de las ocasiones no pueden ser aprovechadas, relegándose a simples ayudas que no transforman ni mejoran niveles de vida.
MATERIALS AND METHODS
Different methods were used in the development of this research. The bibliographic documentary analysis, to determine the system of concepts and theoretical references in the contextual framework, taking as object of study the canton Jipijapa, located south of the province of Manabí, between 01 degrees 10 minutes and 01 degrees 47 minutes south latitude and between 80 degrees 25 minutes and 80 degrees 52 minutes west longitude. It has a surface of 1540Km², there is an isolated and irregular mountain massif that develops between Jipijapa and Manta, surrounded to the north and west by the Pacific Ocean, to the south by the Jipijapa Valley and to the east by the Portoviejo River. The climate is tropical dry. The average temperature is 24 degrees Celsius with an average annual rainfall of 1,280 cubic millimeters [Plan de Desarrollo y Ordenamiento Territorial, cantón Jipijapa (PDOT, 2015)].
It was proceeded to establish a socioeconomic situational diagnosis with information determined through surveys of microentrepreneurs, using a population selection method and a sample of the total database of microenterprises legally registered in the Internal Revenue Service of Ecuador, Jipijapa branch. The formula was:
In order to measure the results of the application of the public policies developed for the microenterprise sector by the decentralized autonomous government of the canton of Jipijapa through the fulfillment of plans, programs and projects planned, budgeted and executed, the method of evaluation of management indicators of the State Comptroller General's Office 2005 was used, as detailed below:
Efficiency:
Efficacy:
Effectiveness:
In order to validate the results of the socioeconomic situational diagnosis, the statistical analysis method was used through the Statistical Package for the Social Sciences (SPSS), whose tabulation and interpretation of data was used with the correlation analysis of data between the effectiveness of the application of public policies and the level of development of small and medium-sized enterprises, according to the interviewees and the result of the tabulation of the surveys.
RESULTS AND DISCUSSION
Theoretical references of public policies
The interest in politics as a science originated from the ideas of state interventionism and in the forms of social life of communities; for economists its study is found in the variations of public policies, in economic factors and in the need to help political decision-makers through a good methodology for a government.
Public policy is "the action of public authorities within society" and "a programme of action by a public authority" (Bogotá, 2009). Aguilar sees it as "a set of decisions and strategies adopted by a legitimate authority to solve complex public problems" (Semplades, 2011).
From this approach it can be said that public policies are mechanisms established as guides that, through strategic actions, provide adequate and inherent solutions to the main problems of the community and to the different segments of a society.
Public policies constitute the main instrument of action of a government, represented by this action in the management of the destiny of a country, at local, territorial and national levels, oriented to the solution of collective problems (Boscan & Quintero, 2014).
Faced with this scenario, public policies have become a tool for carrying out an administrative activity within public institutions that meet the requirements or needs of the community. It is also an element of guidance for government institutions in the development of their goals and objectives vis-à-vis the societies that govern them. To focus this analysis, Gutiérrez defines public administration as the focus of government activities from the public sector, and describes it as a "complex system of state organizations in charge of managing government policies, programs, based on state policies, laws and legal norms in force and an assigned budget" (Torres, 2016). When public policies are analyzed by governments, it is inevitable to think that there are determining factors at the moment of their application and emergence, from social and administrative practice.
Therefore, the author agrees in the existence of four elements for the emergence of public policies such as: the implication of the government, the perception of problems, and the definitions of objectives and processes (Roth, 2002).
A serious observance is recommended when designing public policies, since they will serve as goals that will delimit the scope of the proposals and projects of the entities of the State; some authors propose as elements of quality: the capacity of resolution and execution, stability, adaptability, coherence and coordination.
Public policies arise as a product of a political-administrative system, where a group of individuals must be able to exercise a hierarchy and stability, in the performance of certain functions, where the main component must be a conscious execution of activities planned in coherence with the needs, within a framework of reference of organizations. Public policies are those that condition the way in which potential resources, especially in underprivileged areas, are used to achieve local development, inasmuch as they define the limits of the functioning of economic agents.
Today's societies cannot speak of development but rather of articulating the production of resources and the capacities of communities to satisfy needs and be able to supply others. One way to foster production is through the emergence of small and medium-sized enterprises. Microenterprises play an important role, since they are the most effective ways for communities to directly influence local development; in Latin America their contribution in terms of employment has been important, as shown in table 1 below:
Table 1. - Latin America: Weight of small and medium enterprises
Proportion of establishment by company size (Percentages) |
||||
Country |
Micro |
Small |
Medium |
Large |
Argentina |
81,6 |
16.1 |
1,9 |
0,4 |
Brazil |
85,4 |
12,1 |
1,4 |
1,0 |
Chile |
90,4 |
7,8 |
1,1 |
0,6 |
Colombia |
93,2 |
5,5 |
1,0 |
0,3 |
El Salvador |
95,4 |
3,8 |
0,6 |
0,2 |
Ecuador |
96,8 |
2,5 |
0,5 |
0,2 |
Mexico |
95,5 |
3,6 |
0,8 |
0,2 |
Peru |
98,1 |
1,5 |
0,34 |
0,02 |
Uruguay |
83,8 |
13,4 |
3,1 |
0,6 |
Trinidad and Tobado |
79,6 |
17,5 |
2,4 |
0,5 |
Source: Sela, 2014
According to the 2014 Latin American and Caribbean Economic System, small and medium-sized enterprises have generated a substantial contribution to employment and Gross Domestic Product, but their contribution to exports is still marginal and minority when compared to countries of the Organization for Economic Cooperation and Development (OECD), such as Italy, Spain, Germany and France (Graph 1).
Graph 1. - Companies that export directly and indirectly, according to size, by region, 2009-2010 (percentages)
Source: Based on information from the World Bank (Companies Survey), 2009-2010, OCDE 2012)
The delineation of public policies to strengthen small and medium-sized enterprises must provide the mechanisms and tools to be able to respond to market demand, with the aim of generating greater promotion and growth for these units.
Giaoutzi (2007) rightly proposes that policies to promote the microenterprise sector in the short term should be implemented as mere palliatives to mitigate the ravages of unemployment; once that sector is in a stage of structural changes that positions it within the market as a solid sector, then policies to promote microenterprises will be taken as fundamental with a long-term vision (Díaz Arreguín, 2010).
Like Giaoutzi (2007), the author considers that public policies should be defined as the mechanisms to establish processes, steps, forms of behavior that induce the development of small and medium enterprises in different business areas (production, technology, finance, etc.), but it is necessary to consider the objectives and goals of those who must elaborate the policies and enforce them, these must also be able to make the best use of the resources that society has.
Authors such as Saavedra, Tapia and Aguilar propose some aspects in the elaboration of policies for microenterprises, the author considers the following to be relevant:
Freije (2001) recommends facilitating the registration of new companies: it should become an easy and quick procedure. Local governments, as well as microfinance banks, should undertake promotional activities that induce small entrepreneurs to register their businesses, in order to have access to microcredit and training in management skills. Promotion of registration may encounter resistance from those companies that prefer to remain unregistered in order to evade tax collection (Albornoz Guarderas, Oleas & Ricaurte, 2011).
In any case, the effectiveness of policies focused on small and medium enterprises, rather than having large programs or interventions, consist of small actions, at the local or regional scale and are usually the result of diagnoses made from the perspective of the organizations themselves (Díaz Arreguín, 2010).
However, the National Economic and Social Policy Council (CONPES) document on "Policy Guidelines for Enterprise Development" for 2004 states that "given the existence of a large number of policies and programs available to the business sector, it is necessary to evaluate them and, where necessary, reorient them to prepare and strengthen the productive apparatus in the face of the challenges of international competition" (Ospina López & Rodríguez Agudelo, 2007).
Historical references of public policies in Ecuador
From the Ecuadorian context, the public policies for the development of small and medium enterprises arose through reforms in the different government periods; these were designed as a means for the strengthening of businesses of gold washing, collection of laurel wax, tagua, vanilla or sarsaparilla by the peoples of Quijos or Napo, peoples from the East and in the whites of Quijos in the first years of constitution, which allowed for the exchange of indigenous products for beads or goods such as fabrics, tools and others. The public administrations were directed to protect these trades in many cases.
In the 1930s and 1970s, the Ecuadorian government opted for import substitution policies, centralized economic growth, and the production of private industries and businesses.
Already in 1938, with a new reform, the policy of protection to the development of the productive sectors arose; this reform declared that "no one could import goods, regardless of their class, without having previously obtained permission from the Central Bank of Ecuador. Also from this date and during 90 days more, this bank will not sell foreign currencies to the commercial banks, it was prohibited to these and commercial houses to receive or to conserve deposits of the public in foreign currency"; this reform would last only five months, due to its scarce applicability in view of the social necessities (Romero Alemán, 1996).
In 1941, with an inflationary process highly costly for the country and with the need to finance the war with the neighboring country of Peru, the state established the policy of issuing money that would serve to cover the expenses incurred in these wars and productive activities. Two years later, in view of the demands of development and progress, the banks were forced to invest in agricultural activities; that year also saw the emergence of Decree No. 1046 of July 13, which sought to avoid the effects of the increase in foreign exchange and the increase in money in the economy, forming the "stabilization fund", which would serve to satisfy the demand for money in the post-war period. Banks were obliged to invest 20 % of their deposits in the purchase of gold certificates issued by the Central Bank of Ecuador (BCE). In October 1943 a tax of 0.5 % of the total credits on all operations of loans and discounts to the commercial banks was decreed, to be carried out by the banks, and of 1 % for one time for mortgage loans (Romero Alemán, 1996).
In 1968, with the discovery of oil in the Ecuadorian East, hydrocarbon exports acquired greater importance, transforming the Ecuadorian economy and society. Foreign exchange earnings from exports went from 300 million dollars in 1972 to around 2500 million in 1980, encouraging investment policies in basic infrastructure (productive and social), and the financing of accumulation for the emergence of a productive structure of an industrial type, oriented towards the internal market (IX Regional Planning Council, 1992).
In Ecuador, the formulation of public policies for the development of small and medium-sized enterprises until the 1990s was formulated under the import substitution model; then, the neoliberal policies implemented and the disappearance of production planning institutions, as well as the cut in public budgets, limited support for this sector, resulting in the disappearance of some of these business units. At the end of the 1990s, the concept of globalization and competitiveness prompted government economies to turn their attention to this forgotten sector, especially in Ecuador, where a new institutional framework was established; however, public policies did not have the expected scope for small and medium-sized enterprises, support programs were insufficient and few relevant (Nabernegg, 2015).
In recent decades, with the process of change created by the spaces established by the governments in office, public policies have been drawn up with a focus on improving the economic-productive component. In the 2008 constitution, a new legal and juridical environment is presented, where the formulation, execution, evaluation and control of public policies must be for the strengthening of the diverse sectors to make good living effective.
Article 293 of the 2008 Constitution establishes the need to generate a National Development Plan or National Plan for Good Living in order to implement the State's general budget. The National Plan for Good Living establishes national policies and the main constitutional elements that guide the establishment of rights; it also establishes guidelines and strategies that guide the approval of the National Development Plan of the State, the strategy of accumulation, distribution and redistribution in the long term; likewise, it seeks to promote economic activities, implement incentive mechanisms in economic activities, especially in the popular and solidarity sector, as well as in small and medium enterprises. This document was updated for the years 2017 to 2021 in the government of the new president Lenín Moreno Garcés.
The Organic Law of Popular and Solidarity Economy also formulates public policies to encourage the organization of micro-producers, associations and cooperatives, with the use of existing social capital and includes differentiated contribution categories for specific groups; it also encourages affiliation to social security.
Finally, a policy must provide solutions to social problems, for which the participation of those involved in the community is necessary. Policies for the development of microenterprises must be designed without ambiguity in terms of hierarchies of objectives and precision in identifying problems. The implementation must strengthen the capacity of those involved, especially if the results are to be reflected and maintained in the long term, and not remain as intentions.
Situational diagnosis
For the identification of legally constituted microenterprises in the canton of Jipijapa, the data provided in the database of the Internal Revenue Service of Ecuador, Jipijapa agency, were used as references. From a total population of 105580, a sample of 368 individuals was obtained, who carry out activities in the microenterprise sector, who provided adequate information, the results of which are presented below:
In the question: have you ever been selected to participate in any project or program of the canton government for the functioning of your activity?
On the question: Which of the following public entities do you consider important for the development management of the microenterprise sector?
On the question: how do you evaluate the execution of the public management of the Decentralized Autonomous Government (GAD) of the Jipijapa canton in the development and strengthening of microenterprises?
On the question: do you know of any public policies developed by the local GAD for the strengthening of microenterprises?
On the question: do you know if GAD has managed plans, programs, processes that benefit microenterprises, yes or no, and which ones?
On the question: how do you think public policies should be managed for the development of your business activities?
Correlation of the variables Local Development and Local Public Management
Of the 368 respondents in Jipijapa canton in the study of variables, with the use of cross tables were analyzed the variables local development and the practice of public management, giving as results:
The correlation between public management and local development is inversely high, as shown in table 2, whose value is less than 1, which is demonstrated in the survey on the consideration of the existence of public management (very successful, moderately successful, scarcely successful, not successful). The following results were obtained: 13 % of those surveyed state that municipal government management is very successful; 18 % that it is successful; 31 % that it is moderately successful; 16 % that it is not very successful; 12 % that it is not very successful and 10 % that it is not successful. When asked whether local development in the canton is high, medium and low, 27 % answered that it is high, 30 % of respondents said it is medium and 43 % of respondents indicate that development is low.
Table 2. - Symmetric measures
Source: Prepared by the authors, based on data from SPSS version 22.0
The data in table 3 indicate that the development and growth desired by the community has not yet been achieved. It is important that strategies and policies have greater impact and participation in microenterprises and that the state provides greater support.
Table 3. - GPL*DL cross tabulation
Source: Prepared by the authors, based on data from SPSS version 22.0
Correlation of public management variables and microenterprises
The results obtained from the 368 respondents in Jipijapa canton in the analysis of variables, with the use of cross tables on the growth of microenterprises and the practice of public management, show that there is a high correlation in the negative axis, as well as poor public management that leads to low growth in agricultural microenterprise units. This demonstrates the insufficiency that exists in this field of research.
The answers on the consideration of the existence of a very successful public management, moderately successful, scarcely successful, unsuccessful, yielded the following results: 13 % of those surveyed stated that municipal government management is very successful; 18 % that it is successful; 31 % that it is moderately successful; 16 % that it is scarcely successful; 12 % that it is unsuccessful and 10 % that the management is unsuccessful. In addition, the majority of those surveyed consider it important to propose a management model that better articulates public policies for the development of the economic sector. Thus, of the 368 respondents, 90 % state that the management model for the development of agricultural microenterprises should be improved and 10 % indicate that it should first start from the recognition of a growth management to induce the agricultural microenterprise sector, as shown in graph 2.
Graph 2. - Public Management Variables and Microenterprise Growth
Source: Own elaboration, based on data from SPSS version 22.0
The results of the application of public policies implemented in the microenterprise sector by the decentralized autonomous government of the canton of Jipijapa, through the fulfillment of plans, programs and projects planned, budgeted and executed, with the method of evaluation of management indicators of the State Comptroller General's Office 2005, were: the efficiency of the Decentralized Autonomous Government of Jipijapa canton in relation to the programmed expenditure that was budgeted of $4070000.00 in the Plan of Territorial Ordination 2015, in the programs and projects to execute, according to the calculation, obtained a value of 1.79 %; the efficiency determined in function of the programmed goals projected in 15 programs against the achieved ones that were seven programs, with respect to the real time of four years and programmed was of 46.7 %; the effectiveness of the achieved and programmed goals was of 46.7 %.
In conclusion, it should be pointed out that there is little coordination between programmes, action plans and instruments in the public administration of local governments, which reflects the lack of a comprehensive and long-term vision of public policies, which has led in some cases to duplicate efforts and work, generating a loss of potential synergies between the different programmes and, therefore, the lack of continuity over time of many interventions.
Public policies for the development of microenterprises in Ecuador present difficulties in achieving practical results. There is still a clear difficulty in generating actions to increase the number of companies or maintain in the long term those that are already established, because there are no programs to solve the problem of lack of human talent, natural resources and financial resources.
At present, there are no systematic mechanisms or researches that evaluate public policies and programs, that allow to identify their weaknesses in order to feed them back, modify them and improve the instruments or strategies used.
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