A Helping Hand or the Long Arm of the Law? : Do Carrots or Sticks Work Best for Bringing Informal Firms into the Formal Sector?

Since 2004, 75 percent of countries have adopted at least one reform making it easier to register a business. Yet, despite these efforts, the majority of firms in most developing countries remain informal. This is of concern to policymakers, who wo...

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Main Authors:	de Andrade, Gustavo Henrique, Bruhn, Miriam, McKenzie, David
Format:	Brief
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	ACCOUNTANTS ACCOUNTING ACCOUNTING SERVICES BUSINESSES COLLABORATION COMPLEXITY ENTREPRENEUR EXPERIMENTATION FIRMS INSPECTION INSPECTIONS LICENSE RESULT RESULTS SMALL FIRMS STORES UNFAIR COMPETITION
Online Access:	http://documents.worldbank.org/curated/en/2013/05/17810458/helping-hand-or-long-arm-law-carrots-or-sticks-work-best-bringing-informal-firms-formal-sector http://hdl.handle.net/10986/22623

id	okr-10986-22623
recordtype	oai_dc
spelling	okr-10986-226232021-04-23T14:04:09Z A Helping Hand or the Long Arm of the Law? : Do Carrots or Sticks Work Best for Bringing Informal Firms into the Formal Sector? de Andrade, Gustavo Henrique Bruhn, Miriam McKenzie, David ACCOUNTANTS ACCOUNTING ACCOUNTING SERVICES BUSINESSES COLLABORATION COMPLEXITY ENTREPRENEUR EXPERIMENTATION FIRMS INSPECTION INSPECTIONS LICENSE RESULT RESULTS SMALL FIRMS STORES UNFAIR COMPETITION Since 2004, 75 percent of countries have adopted at least one reform making it easier to register a business. Yet, despite these efforts, the majority of firms in most developing countries remain informal. This is of concern to policymakers, who worry that a large stock of informal firms results in a loss in tax revenue, unfair competition for formal firms, and a culture of informality. Much less attention has been given to increasing the costs of remaining informal through better enforcement of existing laws. A field experiment conducted with the State Government of Minas Gerais in the city of Belo Horizonte in Brazil provides an opportunity to test the relative merits of further cost-reduction versus enforcement in formalizing firms. Further experimentation as to how to better improve the process of enforcement of regulations, seems an important area for policy and research efforts going forward. 2015-09-14T21:48:29Z 2015-09-14T21:48:29Z 2013-05 Brief http://documents.worldbank.org/curated/en/2013/05/17810458/helping-hand-or-long-arm-law-carrots-or-sticks-work-best-bringing-informal-firms-formal-sector http://hdl.handle.net/10986/22623 English en_US Finance PSD Impact;no. 24. The lessons from DECFP impact evaluations CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Brief
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTANTS ACCOUNTING ACCOUNTING SERVICES BUSINESSES COLLABORATION COMPLEXITY ENTREPRENEUR EXPERIMENTATION FIRMS INSPECTION INSPECTIONS LICENSE RESULT RESULTS SMALL FIRMS STORES UNFAIR COMPETITION
spellingShingle	ACCOUNTANTS ACCOUNTING ACCOUNTING SERVICES BUSINESSES COLLABORATION COMPLEXITY ENTREPRENEUR EXPERIMENTATION FIRMS INSPECTION INSPECTIONS LICENSE RESULT RESULTS SMALL FIRMS STORES UNFAIR COMPETITION de Andrade, Gustavo Henrique Bruhn, Miriam McKenzie, David A Helping Hand or the Long Arm of the Law? : Do Carrots or Sticks Work Best for Bringing Informal Firms into the Formal Sector?
relation	Finance PSD Impact;no. 24. The lessons from DECFP impact evaluations
description	Since 2004, 75 percent of countries have adopted at least one reform making it easier to register a business. Yet, despite these efforts, the majority of firms in most developing countries remain informal. This is of concern to policymakers, who worry that a large stock of informal firms results in a loss in tax revenue, unfair competition for formal firms, and a culture of informality. Much less attention has been given to increasing the costs of remaining informal through better enforcement of existing laws. A field experiment conducted with the State Government of Minas Gerais in the city of Belo Horizonte in Brazil provides an opportunity to test the relative merits of further cost-reduction versus enforcement in formalizing firms. Further experimentation as to how to better improve the process of enforcement of regulations, seems an important area for policy and research efforts going forward.
format	Brief
author	de Andrade, Gustavo Henrique Bruhn, Miriam McKenzie, David
author_facet	de Andrade, Gustavo Henrique Bruhn, Miriam McKenzie, David
author_sort	de Andrade, Gustavo Henrique
title	A Helping Hand or the Long Arm of the Law? : Do Carrots or Sticks Work Best for Bringing Informal Firms into the Formal Sector?
title_short	A Helping Hand or the Long Arm of the Law? : Do Carrots or Sticks Work Best for Bringing Informal Firms into the Formal Sector?
title_full	A Helping Hand or the Long Arm of the Law? : Do Carrots or Sticks Work Best for Bringing Informal Firms into the Formal Sector?
title_fullStr	A Helping Hand or the Long Arm of the Law? : Do Carrots or Sticks Work Best for Bringing Informal Firms into the Formal Sector?
title_full_unstemmed	A Helping Hand or the Long Arm of the Law? : Do Carrots or Sticks Work Best for Bringing Informal Firms into the Formal Sector?
title_sort	helping hand or the long arm of the law? : do carrots or sticks work best for bringing informal firms into the formal sector?
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2013/05/17810458/helping-hand-or-long-arm-law-carrots-or-sticks-work-best-bringing-informal-firms-formal-sector http://hdl.handle.net/10986/22623
_version_	1764451586116943872

A Helping Hand or the Long Arm of the Law? : Do Carrots or Sticks Work Best for Bringing Informal Firms into the Formal Sector?

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