Did raising doing business scores boost GDP?

Tamanna Adhikari and Karl Whelan ()

Journal of Comparative Economics, 2023, vol. 51, issue 3, 1011-1030

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 Doing Business scores that are initially uncorrelated with GDP, thus addressing an important endogeneity problem that affects the cross-sectional literature on this topic. We report a robust finding that improvements in Doing Business scores 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; Economic development; Vector autoregression methods (search for similar items in EconPapers)
JEL-codes: O11 O43 O47 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:51:y:2023:i:3:p:1011-1030

DOI: 10.1016/j.jce.2023.04.003

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