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In recent work, Stephen Anderson and I found that subsidizing small firms in Nigeria to use HR consultants to hire a marketing or accounting worker, or outsourcing these services to a professional accounting or marketing company were both more effective than spending this money on trying to train the entrepreneur. The natural question that then arises is Why don’t more small firms simply purchase these services for themselves? That is, why are government subsidies needed to get firms to start using these services? In a new working paper, we report on a series of follow-on activities des...