ative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose.No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Note that link provided above includes additional terms and conditions of the license. to the private sector as a reliable partner to boost economic value added and labour growth. However, this expectation has never been grounded in fact, as there is no empirical study of the Caribbean private sector. Therefore, this study is ground-breaking because it provides a comprehensive empirical analysis of the Caribbean business sector.The report revisits the theme of low Caribbean growth, viewed through a macroeconomic lens in our previous report (Is there a Caribbean Sclerosis?), but takes a microeconomic perspective by using firm-level data.The performance of the private sector is crucial for a country's economic growth and employment generation. As such, the results of the analysis are not comforting.In terms of sales growth, employment growth, efficiency, and total factor productivity, the Caribbean underperforms the rest of the small economies of the world. The gap is larger for commodity-dependent economies (Guyana, Suriname, and Trinidad and Tobago) than for tourism-dependent economies (Barbados, Jamaica, and The Bahamas). Thus, the existing Caribbean business sector is not up to the challenge to increase the region's economic growth and employment and hence, to increase public resources and improve the welfare of citizens in the region.Why? The report uses multiple approaches to identify the constraints to the private sector, constraints include the role of firm characteristics and constraints, including international trade and foreign direct investment, financing, crime, inadequate labour, electricity issues, lack of innovation, gender disparity, and government policies that are not good for business. The study estimates the contribution to the performance gap of the region's existing endowments (i.e., the characteristics and constraints of the firms) as well as the returns to those characteristics and constraints. It finds that the returns contribute more to the gap than do characteristics and constraints themselves.It turns out that fine-tuning the engine that is the private sector, as it were, will take more than an oil change. The Caribbean private sector is falling behind because vi AN ENGINE OF GROWTH? THE CARIBBEAN PRIVATE SECTOR NEEDS MORE THAN AN OIL CHANGEits policy environment hinders rather than promotes dynamic, innovative, and export-oriented b...