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Author(s): Darlin NAY, Seakleng LEANG, Chamroeun HENG, and Vengkry HEANG
Published: 4-January-2026
Keyword: MSMEs, Developmental States Theory, Competency of Bureaucracy, Autonomy, Embeddedness
Abstract
Contrary to the traditional view that micro, small, and medium enterprises (MSMEs) lose relevance as economies mature, recent global data shows they remain central to development, accounting for 90 percent of businesses, 60 to 70 percent of employment, and around 50 percent of GDP worldwide. MSMEs also serve as drivers of competition, entrepreneurship, structural transformation, and poverty alleviation. In Cambodia, MSMEs form the backbone of the economy, yet they face persistent challenges, including limited access to finance, weak institutional support, skill deficits, informality, and fragmented market access. While such constraints are well documented, existing studies often overlook the deeper institutional and governance dimensions that shape MSMES development.
This paper addresses that gap by applying developmental state theory to examine the institutional framework governing MSMEs development in Cambodia. Specifically, it investigates the extent to which Cambodia exhibits characteristics of a developmental state, identifies which attributes are present or absent, and explores why existing features fail to function effectively in practice.