How "Doing Business" jeopardizes institutional reform

Benito Arruñada

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Simplifying business formalization and eliminating outdated formalities is often a good way of improving the institutional environment for firms. Unfortunately, the World Bank’s "Doing Business" project is harming such policies by promoting a reform agenda that gives them priority even in countries lacking functional business registers, so that the reformed registers keep producing valueless information, but faster. Its methodology also promotes biased measurements that impede proper consideration of the essential tradeoffs in the design of formalization institutions. If "Doing Business" is to stop jeopardizing its true objectives and contribute positively to scientific progress, institutional reform and economic development, then its aims, governance and methodology need to change.

Keywords: Starting business; doing business; informal economy; company registers (search for similar items in EconPapers)
JEL-codes: K22 K23 L59 O17 (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-law
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Citations: View citations in EconPapers (1)

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