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Deregulation of Business

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  • Yakovlev, Evgeny
  • Zhuravskaya, Ekaterina

Abstract

What determines the enforcement of deregulation reform of business activities? What are the outcomes of deregulation? We address these questions using an episode of a drastic reform in Russia between 2001 and 2004 which liberalized registration, licensing, and inspections. Based on the analysis of micro-level panel data on regulatory burden, we find that: 1) On average, the reform reduced the administrative costs of firms; but, the progress of reform had a substantial geographical variation. 2) The enforcement of deregulation reform was better in regions with a transparent government, low corruption, better access of the public to independent media sources, a powerful industrial lobby, and stronger fiscal autonomy. 3) Using the exogenous variation in regulation generated by the interaction of reform and its institutional determinants, we find a substantial positive effect of deregulation on net entry and small business employment and no effect on pollution and public health. The results support public choice theory of the nature of regulation and are inconsistent with the predictions of public interest theory.

Suggested Citation

  • Yakovlev, Evgeny & Zhuravskaya, Ekaterina, 2007. "Deregulation of Business," CEPR Discussion Papers 6610, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6610
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Francesco Bripi, 2016. "The Role of Regulation on Entry: Evidence from the Italian Provinces," World Bank Economic Review, World Bank Group, vol. 30(2), pages 383-411.
    2. Leora Klapper & Raphael Amit & Mauro F. Guillén, 2010. "Entrepreneurship and Firm Formation across Countries," NBER Chapters,in: International Differences in Entrepreneurship, pages 129-158 National Bureau of Economic Research, Inc.
    3. repec:hig:fsight:v:11:y:2017:i:3:p:83-93 is not listed on IDEAS
    4. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
    5. Antonio Ciccone & Elias Papaioannou, 2008. "Entry regulation and intersectoral reallocation," Economics Working Papers 1353, Department of Economics and Business, Universitat Pompeu Fabra.
    6. Clarisse Nguedam Ntouko, 2013. "Regulatory Framework and Private Investment: Empirical Evidence for Developing Countries," Economics Bulletin, AccessEcon, vol. 33(1), pages 494-510.
    7. World Bank, 2013. "Russian Federation : National and Regional Trends in Regulatory Burden and Corruption," World Bank Other Operational Studies 16566, The World Bank.
    8. Lee Branstetter & Francisco Lima & Lowell J. Taylor & Ana Venâncio, 2014. "Do Entry Regulations Deter Entrepreneurship and Job Creation? Evidence from Recent Reforms in Portugal," Economic Journal, Royal Economic Society, vol. 124(577), pages 805-832, June.
    9. Lixin Colin Xu, 2011. "The Effects of Business Environments on Development: Surveying New Firm-level Evidence," World Bank Research Observer, World Bank Group, vol. 26(2), pages 310-340, August.
    10. International Finance Corporation & World Bank, 2008. "Doing Business 2009 : Comparing Regulation in 181 Economies," World Bank Publications, The World Bank, number 6313.
    11. repec:wsi:jdexxx:v:17:y:2012:i:01:n:s1084946712500045 is not listed on IDEAS

    More about this item

    Keywords

    Deregulation; Enforcement; Entry; Public choice; Reform; Regulation; Transparency;

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • K2 - Law and Economics - - Regulation and Business Law
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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