Finding a Path to Formalization in Benin : Early Results after the Introduction of the Entreprenant Legal Status
In April 2014, the Government of Benin launched the entreprenant status, a simplified and free legal regime offered to small informal businesses to enter the formal economy. This paper presents the short-term results of a randomized impact evaluati...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/12/25660436/finding-path-formalization-benin-early-results-after-introduction-entreprenant-legal-status http://hdl.handle.net/10986/23472 |
| Summary: | In April 2014, the Government of Benin
launched the entreprenant status, a simplified and free
legal regime offered to small informal businesses to enter
the formal economy. This paper presents the short-term
results of a randomized impact evaluation testing three
different versions of the entreprenant status on business
registration decisions, each version including incremental
incentives to registration: (i) information on the new legal
status and its benefits, (ii) business training, counseling
services, and support to open a bank account, (iii) tax
mediation services. The study included 3,600 informal
businesses operating with a fixed location in Cotonou,
Benin, which were randomly allocated between three treatment
groups and one control group. One year after the program
launch, all versions of the program had significant impact
on formalization rates. The impact was 9.1 percentage points
in the first treatment group; 13 percentage points in the
second group; and 15.8 percentage points in the last group.
The program had a higher impact on male business owners,
with more education, operating outside Dantokpa Market, in
sectors other than trade, and that before being offered the
incentives to formalization had characteristics similar to
businesses that were already formal. Data from a second
follow-up survey, which is expected to take place in March
2016, will explore the impacts on other outcomes, like
business performances or access to banking. |
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