Working Paper: CEPR ID: DP7080
Authors: Simeon Djankov
Abstract: Simplifying entry regulation has been a popular reform since the publication of Djankov et al (2002). The inclusion of business entry indicators in the World Bank?s Doing Business project has led to an acceleration in reform: in 2003-2008, 193 reforms took place in 116 countries. A large academic literature has followed: 195 academic articles have used the data compiled in Djankov et al and subsequently by the World Bank. This paper identifies three theories on why some countries impose burdensome entry requirements. It also surveys the literature on the effects of making business entry easier.
Keywords: Business Entry; Productivity; Regulatory Reform
JEL Codes: O13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Heavier regulation of entry (L59) | Increased corruption (D73) |
| Heavier regulation of entry (L59) | Larger unofficial economy (E26) |
| Less democratic governments (P16) | Stricter entry regulations (Z38) |
| Stricter entry regulations (Z38) | No visible social benefits (D69) |
| Easing entry regulations (Z38) | Enhanced entrepreneurship (O35) |
| Easing entry regulations (Z38) | Increased productivity (O49) |
| Easing entry regulations (Z38) | Reduced corruption (H57) |
| Increase in entry costs (L11) | Decrease in entry rate (J69) |
| Moving from minimally regulated to highly regulated (L51) | Reduction in entry rates (J68) |
| Regulatory reforms (G18) | Increased business registrations (M13) |
| Regulatory reforms (G18) | Job creation (J23) |
| Regulatory reforms (G18) | Stimulated competition (L13) |
| Stimulated competition (L13) | Lower prices (D49) |
| Stimulated competition (L13) | Increased overall economic activity (F69) |