Regulation and noncompliance: magnitudes and patterns for India's factories act

Urmila Chatterjee and Ravi Kanbur

No 6755, Policy Research Working Paper Series from The World Bank

Abstract: Noncompliance with regulations by enterprises is said to be rife in developing countries. Yet there is limited systematic evidence of the magnitude of noncompliance at the enterprise level. Making innovative use of two complementary data sources, this paper quantifies noncompliance for India's Factories Act without the question of illegality ever being raised directly with enterprises. The paper finds that more than twice as many firms are not complying as are complying. Further, the number of noncompliant firms is much larger than the number of firms adjusting out of the regulation. Thus noncompliance with the Factories Act is a key feature of the"missing middle"in India. The paper explores the main trends and patterns of noncompliance and highlights a number of key issues for further analytical and policy research.

Keywords: Microfinance; Regulatory Regimes; Labor Markets; Labor Policies; Small Scale Enterprise (search for similar items in EconPapers)
Date: 2014-01-01
New Economics Papers: this item is included in nep-iue
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Regulation and Non-Compliance: Magnitudes and Patterns for India's Factories Act (2014)
Working Paper: Regulation and Non-Compliance: Magnitudes and Patterns for India's Factories Act (2013)
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