IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Public institutions and private transactions : the legal and regulatory environment for business private transactions in Brazil and Chile

Listed author(s):
  • Stone, Andrew
  • Levy, Brian
  • Paredes, Ricardo

Drawing on the new institutional economics, the authors examine the impact on businesses of Brazil's relatively complex, nontransparent legal and regulatory institutions and compare their costs with those of Chile's institutions, which are relatively simple. They examine four basic areas where legal and regulatory institutions could create critical obstacles to efficiency in the garment industries of Sao Paulo and Santiago: (a) the start-up of a new business (entry); (b) the regulation of business; (c) orders by customers of garment firms; and (d) sales with credit. They find that Chilean business transactions benefit from legal simplicity and more consistent enforcement than in Brazil, but that these perceived advantages are offset because of the differences between formal law and practice in Brazil. In two of these areas, Brazil has evolved some effective institutional substitutes to reduce the costs that would otherwise have been imposed by inefficient formal institutions. In the entry of new businesses, professions have evolved to transform the process of registering a new business from a potentially tortuous obstacle path into a fairly affordable one-stop process. In debt collection, information systems limit the need to resort to the formal legal system. Nevertheless, regulation raises the cost of transactions for Brazilian businesses. Costs are further raised by greater uncertainty and frequent renegotiation of orders.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 891.

in new window

Date of creation: 30 Apr 1992
Handle: RePEc:wbk:wbrwps:891
Contact details of provider: Postal:
1818 H Street, N.W., Washington, DC 20433

Phone: (202) 477-1234
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:891. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.