Administrative barriers to foreign investment in developing countries
Recent international experience has shown that excessively complex administrative procedures, required to establish, and operate a business, discourage inflows of foreign direct investment. The authors present a new database on the administrative costs faced by private investors in 32 developing countries. The database is much more comprehensive than the existing sources, as it contains not only information on general entry procedures, such as business and tax registration, but also captures regulation on land access, site development, import procedures, and inspections, Thedata include measures on the number of procedures, direct monetary costs, and time. The cost of administrative procedures vary significantly across countries. The most important barriers appear to be the delays associated with securing land access, and obtaining building permits, which in several countries, take more than two years. Countries that impose excessive administrative costs on entry, tend to be equally intrusive in firm operations, thereby weakening the argument that barriers to entry, are a substitute for the government's unwillingness, or inability to regulate enterprise operations. The level of administrative costs is positively correlated with corruption incidence, and exhibits a negative correlation with the quality of governance, degree of openness, and public wages. These correlations suggest that administrative reforms, need to be incorporated into the broader agenda for reforms, such as trade and financial liberalization, the fight against corruption, and public sector administration.
|Date of creation:||31 May 2002|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marianne Bertrand & Francis Kramarz, 2002.
"Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 117(4), pages 1369-1413.
- Marianne Bertrand & Francis Kramarz, 2001. "Does Entry Regulation Hinder Job Creation ? Evidence from the French Retail Industry," Working Papers 2001-12, Centre de Recherche en Economie et Statistique.
- Bertrand, Marianne & Kramarz, Francis, 2002. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," IZA Discussion Papers 415, Institute for the Study of Labor (IZA).
- Marianne Bertrand & Francis Kramarz, 2001. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," NBER Working Papers 8211, National Bureau of Economic Research, Inc.
- Bertrand, Marianne & Kramarz, Francis, 2001. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," CEPR Discussion Papers 3039, C.E.P.R. Discussion Papers.
- Bai, Chong-en & Wei, Shang-Jin, 2001. "The quality of bureaucracy and capital account policies," Policy Research Working Paper Series 2575, The World Bank.
- Yingqi A. Wei & V. N. Balasubramanyam (ed.), 2004. "Foreign Direct Investment," Books, Edward Elgar Publishing, number 3169.
- Morisset, Jacques, 2000. "Foreign direct investment in Africa : policies also matter," Policy Research Working Paper Series 2481, The World Bank. Full references (including those not matched with items on IDEAS)