Paper #1088

Title:

How "Doing Business" jeopardizes institutional reform

Author:

Benito Arruñada

Date:

May 2008

Abstract:

Simplifying business formalization and eliminating outdated formalities is often a good way of improving the institutional environment for firms. Unfortunately, the World Bank’s "Doing Business" project is harming such policies by promoting a reform agenda that gives them priority even in countries lacking functional business registers, so that the reformed registers keep producing valueless information, but faster. Its methodology also promotes biased measurements that impede proper consideration of the essential tradeoffs in the design of formalization institutions. If "Doing Business" is to stop jeopardizing its true objectives and contribute positively to scientific progress, institutional reform and economic development, then its aims, governance and methodology need to change.

Keywords:

Starting business, doing business, informal economy, company registers

JEL codes:

K22, K23, L59, O17

Area of Research:

Management and Organization Studies / Business Economics and Industrial Organization

Published in:

European Business Organization Law Review, 2009, 10(4), 555-574.

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