A Response to "Is Doing Business Harming Business?"
Simplifying entry regulation has been a popular reform since the publication of de Soto (1989) and Djankov et al (2002). The inclusion of business entry indicators in the World Bank’s Doing Business project has led to a further acceleration in reform. A contrarian view posits that such reforms reduce legal certainty without bringing positive economic or social benefits. This note suggests that this worry is unfounded. The resistance to reforms has come from the beneficiaries of complex entry regulation: notaries, corrupt judges, court clerks and other government officials. In every reform country, these have fought hard to maintain their rents, which come at the expense of new jobs, new businesses, more investment, less corruption and a smaller informal sector.Download paper (PDF, 322KB)