A Framework for Thinking about Enterprise Formalization Policies in Developing Countries
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World Bank, Washington, DC
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What policies encourage firms to become
formal? The standard approach emphasizes reducing the costs
of compliance with government regulation. This is unlikely
to be sufficient. Instead we need to understand compliance
as a function not only of firm-level costs and benefits but
also in terms of the interaction between the firm and its
competitors and between the firm and the state. This paper
emphasizes the coordination and credibility issues involved
in promoting formalization and discusses possible
institutional solutions, among them business associations
that make the benefits of membership dependent on
compliance, information sharing arrangements among
government agencies and improvements in the quality of
public management.
Palabras clave
ADMINISTRATIVE LAW, AGRICULTURE, BUREAUCRATIC REQUIREMENTS, BUSINESS DEVELOPMENT, BUSINESS ENVIRONMENT, COLLECTIVE ACTION, COMPANY, COMPETITIVE ADVANTAGE, COMPETITIVE DISADVANTAGE, COMPETITORS, CONSUMERS, CORPORATION, DEBT, DEVELOPMENT POLICY, DIVERSIFICATION, ECONOMIC ACTIVITIES, ECONOMIC ACTIVITY, ECONOMIC CHANGE, ECONOMIC COOPERATION, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC SECTORS, ELECTRICITY, EMPLOYMENT, ENTERPRISE DEVELOPMENT, ENTREPRENEURS, EVASION, EXPORTS, EXTERNALITIES, FEDERAL GOVERNMENT, FINANCIAL INCENTIVE, FIRMS, FORMS OF REGULATION, GOVERNMENT AGENCIES, GOVERNMENT DEPARTMENTS, GOVERNMENT INTERVENTION, GOVERNMENT INTERVENTIONS, GOVERNMENT OFFICIALS, GOVERNMENT REGULATION, GOVERNMENT REGULATIONS, GOVERNMENT SERVICES, INCOME, INEFFICIENT REGULATION, INFORMAL ARRANGEMENTS, INSURANCE, LARGE ENTERPRISES, LEVIES, LICENSING, MIDDLE INCOME COUNTRIES, NATIONAL GOVERNMENTS, POLICY IMPLICATIONS, POLICY REVIEW, PRIVATE SECTOR, PROVINCIAL AUTHORITIES, PUBLIC, PUBLIC ADMINISTRATION, PUBLIC MANAGEMENT, PUBLIC POLICY, PUBLIC SECTOR, PUBLIC SECTOR MANAGEMENT, PUBLIC SECTOR REFORM, REGISTRAR, REGULATORY ACTIVITY, REGULATORY BURDEN, REGULATORY COMPLIANCE, REGULATORY SYSTEM, SAFETY NETS, SAFETY STANDARDS, SHOPS, SMALL BUSINESS, SMALL BUSINESS TAXATION, SMALL BUSINESSES, SMALL ENTERPRISES, SMALL FIRMS, SME, SME DEVELOPMENT, SUPPLIERS, TAX, TAXATION, TECHNICAL ASSISTANCE, TRANSACTIONS COSTS, TRANSITION ECONOMIES, UNDERLYING PROBLEM, UTILITIES, VENDORS