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How "Doing Business" jeopardizes institutional reform

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Simplifying business formalization and eliminating outdated formalities is often a good way of improving the institutional environment for firms.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

Suggested Citation

  • Benito Arruñada, 2008. "How "Doing Business" jeopardizes institutional reform," Economics Working Papers 1088, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:1088
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    References listed on IDEAS

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    1. Claude Ménard & Bertrand Du Marais, 2006. "Can we rank legal systems according to their economic efficiency?," Post-Print halshs-00273862, HAL.
    2. 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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    Cited by:

    1. Sangheon Lee & Deirdre McCann & Nina Torm, 2008. "The World Bank's “Employing Workers” index: Findings and critiques – A review of recent evidence," International Labour Review, International Labour Organization, vol. 147(4), pages 416-432, December.

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    More about this item

    Keywords

    Starting business; doing business; informal economy; company registers;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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