Keywords: Development, Economic Growth, Financing, Policy Frameworks, Political Economy

Abstract

This paper examined the function of Small and Medium Scale Enterprises in the political economy of development with particular emphasis on how government policies affect their expansion and contributions to the development of different sectors in specific nations. To get an exhaustive understanding of how state policies and SMEs performance interact to foster economic development, the paper utilised institutional theory as its theoretical guide. To achieve a truly global view of the subject matter, four countries were selected across the World regions for analysis, these included included the United States, Brazil, India and South Africa. Therefore, case study method in the comparative methodology adopted. For a thorough analysis, information was taken from official reports, scholarly research, and peer-reviewed publications. This paper found that while emerging economies showed the value of focused interventions to address systemic issues including regulatory hurdles, infrastructural deficiencies, and financial access, developed economies highlighted the effectiveness of strong institutional frameworks and innovation-driven policies. This paper based its advice for Nigeria on lessons learnt from what some of the developed nations are doing to nourishing their SMEs as strategic partners in their economic development, with an emphasis on modifying successful global approaches to fit local socio-political circumstances in Nigeria. The focus for Nigerian state should be using SMEs to reduce poverty, create jobs, and diversify the economy. To achieve that end, there should be consistent policy commitment, strengthening institutions and promoting cooperative efforts with SMEs to position them as catalysts for sustainable development in Nigeria.

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Published: 2026

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