The impact of regulation on growth and informality - cross-country evidence

Norman Loayza (), Ana Maria Oviedo and Luis Servén

No 3623, Policy Research Working Paper Series from The World Bank

Abstract: The authors study the effects of regulation on economic growth and the relative size of the informal sector in a large sample of industrial and developing countries. Along with firm dynamics, informality is an important channel through which regulation affects macroeconomic performance and economic growth in particular. The authors conclude that a heavier regulatory burden-particularly in product and labor markets-reduces growth and induces informality. These effects are, however, mitigated as the overall institutional framework improves.

Keywords: Governance Indicators; National Governance; Environmental Economics&Policies; Public Sector Economics&Finance; Financial Intermediation (search for similar items in EconPapers)
Date: 2005-05-01
New Economics Papers: this item is included in nep-dev and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:3623

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