BDS

Business Development Services: Any non-financial service provided to businesses on either a formal or informal basis. Examples include technical and management training, access to technology and markets, cluster development, association development, access to information, and infrastructure development.

CIS

Commonwealth of Independent States: a loose confederation of twelve of the fifteen states of the former Soviet Union.

Decentralization

A general term referring to the transfer of political, administrative, and/or fiscal authority from the central government to subnational governments at the regional and local level. (See also devolution.)

Devolution

A broad and, in principle, irreversible transfer of central powers, functions, and fiscal sources to elected governments at regional and/or local levels. (This often requires a constitutional reform, and is sometimes a response to insurgency or civil war.) Devolution can be �symmetric� or �asymmetric,� i.e., devolving special powers either to select regions or to all regions.

Governance

The essential domestic functions of government (or, by extension, of any organization), including establishing, publicizing, and enforcing rules and codes of law, as well as instituting and implementing regulatory regimes.

• �Corporate governance� refers to the internal administrative functions of a corporation, as these relate to setting and maintaining standards and rules, especially of financial probity.

• �Economic governance� may refer to the set of economic policies that a government carries out, or to its regulation of a sector of the economy, such as banking.

Indicator

A measurement or index (often statistical) designed to capture, as accurately as possible, a political, economic or social phenomenon (e.g., effective governance or poverty level).

Informal sector

Used in various ways, sometimes interchangeably with the terms shadow economy, hidden economy, black market, and parallel economy. In enterprise development, the term usually refers to small, unregistered firms operating below the level of taxing and regulatory monitoring.

Institution

A set of social, political, or economic roles and procedures, whether established by law or by custom, that function to regulate and/or support the activities of individuals and groups in a society. Examples include religion, ownership, legislation, marriage, a labor market, a monetary system, the state, the firm. (See also organization.)

Market-augmenting

A term introduced by Mancur Olson to refer to the essential government institutions that underpin open markets (e.g., enforceable contract laws).

MCA

Millennium Challenge Award: a newly instituted, multi-million dollar program of U.S. development grants, to be awarded to individual countries selected on the basis of development need coupled with sound governing institutions, and administered by the Millennium Challenge Commission.

NIE

The New Institutional Economics: a field of study, so named by Oliver Williamson, that studies institutional arrangements (and sometimes the broader institutional environment) using techniques such as transaction cost analysis, methodological individualism and bounded rational choice models.

NIS

Newly Independent States: used to refer collectively to the former Soviet Socialist Republics.

Organization

A bounded group having a shared purpose or interest and a defined set of resources (material or non-material).

Primer

An overview giving a balanced introduction to a particular subject.

Secured transaction law

The legal framework necessary to allow for the use of movable or �non-real' property as collateral to secure a loan, particularly important for small enterprise development.

Shadow Economy

Economic activity that is not recorded in any official accounting, due to either methodological errors (the statistical �shadow economy�) or willful hiding (the economic �shadow economy�).

SME; MSME

Small and medium enterprise; micro, small, and medium enterprise.

Social Capital

The institutions, relationships, attitudes, and values that facilitate interactions among people. In contrast to physical and monetary capital, social capital does not necessarily depreciate or dissipate over time, and can in fact increase with use.

Tool

In the field of international development, often used as a synonym for �indicator.�

Toolkit

A manual or a set of guidelines and instructions for use by development professionals, designed to address a specific challenge in project design.

Transaction costs

The resources (e.g., time, effort, and money) that are required for any transaction, whether for business, government, or social purposes.  Transaction costs impact such varied functions as passing a law, implementing privatization policies, attending a family celebration or writing an employment contract.

Transition economy

An economy in the process of being transformed, in varying degree, from state ownership or control of industries to private sector ownership and control, with corresponding political adaptations. (Typically used of post-communist economies.)

Value chain

A set of enterprises or industries related through �vertical� links, as supplier to buyer (of production inputs). Value chains bring together dispersed actors into networks of production, trade, finance and other activities that turn raw materials into finished goods and services for end markets.