Do Business-Friendly Reforms Boost GDP?

Karl Whelan () and Tamanna Adhikari

No 15879, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We use the time series variation in the World Bank's ``distance to frontier'' estimates of the ease of doing business to assess the effects of changes in this variable on real GDP per capita. The use of Vector Autoregression techniques allows us to identify shocks to the ease of doing business that are initially uncorrelated with GDP, thus addressing an important endogeneity problem that affects the cross-sectional literature on this topic. The results are surprising. We report a robust finding that improvements to the ease of doing business have at least a temporary negative impact on GDP and find little evidence for a positive effect in the years following these improvements.

Keywords: Doing business; Institution; Economic growth (search for similar items in EconPapers)
JEL-codes: O43 O47 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP15879 (application/pdf)

Related works:
Working Paper: Do Business-Friendly Reforms Boost GDP? (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:15879

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP15879

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().