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The Regulation of Entry

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Listed:
  • Djankov, S.
  • La Porta, R.
  • Lopez-de-Silanes, F.
  • Shleifer, Andrei

Abstract

We present new data on the regulation of entry of start-up firms in 75 countries. The data set contains information on the number of procedures, official time, and official cost that a start-up must bear before it can operate legally. The official costs of entry are extremely high in most countries. Countries with heavier regulation of entry have higher corruption and larger unofficial economies, but not better quality of public or private goods. Countries with more democratic and limited governments have fewer entry regulations. The evidence is inconsistent with Pigouvian (helping hand) theories of benevolent regulation, but support the (grabbing hand) view that entry regulation benefits politicians and bureaucrats.

Suggested Citation

  • Djankov, S. & La Porta, R. & Lopez-de-Silanes, F. & Shleifer, Andrei, 2002. "The Regulation of Entry," Scholarly Articles 30747190, Harvard University Department of Economics.
    • Handle: RePEc:hrv:faseco:30747190
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    References listed on IDEAS

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    1. Rafael La Porta & Florencio Lopez-de-Silane & Cristian Pop-Eleches & Andrei Shleifer, 2002. "The Guarantees of Freedom," NBER Working Papers 8759, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

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

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