Journal ArticleDOI
Entry Regulation and the Formalization of Microenterprises in Developing Countries
Miriam Bruhn,David McKenzie +1 more
TLDR
The authors summarizes the evidence on the effects of entry reforms and related policy actions to promote firm formalization and concludes that most of these policies result only in a modest increase in the number of formal firms, if at all.Abstract:
The majority of microenterprises in most developing countries remain informal despite more than a decade of reforms aimed at making it easier and cheaper for them to formalize. This paper summarizes the evidence on the effects of entry reforms and related policy actions to promote firm formalization. Most of these policies result only in a modest increase in the number of formal firms, if at all. Less is known about the impact of other forms of business regulations on the performance of low-scale enterprises. Most informal firms appear not to benefit on net from formalizing, so ease of formalization alone will not lead to most of them formalizing. Increased enforcement of rules can increase formality. Although there is a fiscal benefit of doing this with larger informal firms, it is unclear whether there is a public rationale for trying to formalize subsistence enterprises.read more
Citations
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Journal ArticleDOI
Teaching Personal Initiative Beats Traditional Training in Boosting Small Business in West Africa
Francisco Campos,Michael Frese,Michael Frese,Markus Goldstein,Leonardo Iacovone,Hillary C. Johnson,David McKenzie,Mona Mensmann +7 more
TL;DR: It is shown that teaching entrepreneurial skills to the self-employed works much better in terms of increasing both sales and profits, and the psychology-based personal initiative training approach is cost-effective, paying for itself within 1 year.
Journal ArticleDOI
Identifying and Spurring High-Growth Entrepreneurship: Experimental Evidence from a Business Plan Competition
TL;DR: A large-scale national business plan competition in Nigeria is used to help provide evidence on these two questions as mentioned in this paper, which shows that winning the competition leads to greater firm entry, higher survival of existing businesses, higher profits and sales, and higher employment, including increases of over 20 percentage points in the likelihood of having 10 or more workers.
Journal ArticleDOI
Informal entrepreneurship and institutional theory: explaining the varying degrees of (in)formalization of entrepreneurs in Pakistan
TL;DR: A 2012 survey of the varying degrees of informalization of 300 entrepreneurs in Pakistan is reported in this article, finding that 62% of entrepreneurs operate wholly informal enterprises, 31% largely informal and 7% largely formal enterprises.
Journal ArticleDOI
Export Markets and Labor Allocation in a Low-income Country
Brian McCaig,Nina Pavcnik +1 more
TL;DR: This article study the effects of a positive export shock on labor allocation between the informal, microenterprise sector and the formal firm sector in a low-income country and find that the share of manufacturing workers in Vietnam in the formal sector increased by 5 percentage points in response to the US tariff reductions.
Posted Content
Consumers as Tax Auditors
TL;DR: In this article, the enforcement effect of an increased availability of third-party information, and sheds light on how governments can harness this information despite collusion opportunities, is investigated, and the role of the value of rewards in improving enforcement is investigated.
References
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Journal ArticleDOI
The Spreading of Disorder
TL;DR: This work generated hypotheses about the spread of disorder and tested them in six field experiments and found that, when people observe that others violated a certain social norm or legitimate rule, they are more likely to violate other norms or rules, which causes disorder to spread.
Journal Article
National Bureau of Economic Research, Inc.
ReportDOI
The Unofficial Economy and Economic Development
Rafael La Porta,Andrei Shleifer +1 more
TL;DR: The authors found that informal firms are small and extremely unproductive compared with even the small formal firms in the sample, and especially relative to the larger formal firms, which supports the dual economy theory of development, in which growth comes about from the creation of highly productive formal firms.
Book
Good Intentions, Bad Outcomes: Social Policy, Informality, and Economic Growth in Mexico
TL;DR: Good Intentions, Bad Outcomes as discussed by the authors argues that incoherent social programs significantly contribute to this state of affairs and suggests reforms to improve the situation and proposes a plan to reform social and economic policy, an essential element of a more equitable and sustainable development strategy for Mexico.