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How "Doing Business" jeopardizes institutional reform

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Simplifying business formalization and eliminating outdated formalities is often a good way of improving the institutional environment for firms.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.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1088.

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Date of creation: May 2008
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Handle: RePEc:upf:upfgen:1088

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Web page: http://www.econ.upf.edu/

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Keywords: Starting business; doing business; informal economy; company registers;

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  1. Benito Arruñada, 2007. "Market and institutional determinants in the regulation of conveyancers," European Journal of Law and Economics, Springer, vol. 23(2), pages 93-116, April.
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