Entry Regulation and the Formalization of Microenterprises in Developing Countries

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...

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Main Authors:	Bruhn, Miriam, McKenzie, David
Format:	Journal Article
Language:	en_US
Published:	Oxford University Press on behalf of the World Bank 2016
Subjects:	corporations employment entrepreneurs entrepreneuership firms market entry microenterprises business regulation regulatory burden regulatory reform small business SME taxation
Online Access:	http://hdl.handle.net/10986/24188

id	okr-10986-24188
recordtype	oai_dc
spelling	okr-10986-241882021-04-23T14:04:20Z Entry Regulation and the Formalization of Microenterprises in Developing Countries Bruhn, Miriam McKenzie, David corporations employment entrepreneurs entrepreneuership firms market entry microenterprises business regulation regulatory burden regulatory reform small business SME taxation 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 in only a modest increase in the number of formal firms, if there is any increase at all. Most informal firms appear to not benefit on net from formalizing. As a consequence, ease of formalization along will not induce most of them to become formal. 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 attempting to formalize subsistence enterprises. 2016-05-03T19:25:20Z 2016-05-03T19:25:20Z 2014-08-05 Journal Article World Bank Research Observer 1564-6971 http://hdl.handle.net/10986/24188 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	corporations employment entrepreneurs entrepreneuership firms market entry microenterprises business regulation regulatory burden regulatory reform small business SME taxation
spellingShingle	corporations employment entrepreneurs entrepreneuership firms market entry microenterprises business regulation regulatory burden regulatory reform small business SME taxation Bruhn, Miriam McKenzie, David Entry Regulation and the Formalization of Microenterprises in Developing Countries
description	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 in only a modest increase in the number of formal firms, if there is any increase at all. Most informal firms appear to not benefit on net from formalizing. As a consequence, ease of formalization along will not induce most of them to become formal. 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 attempting to formalize subsistence enterprises.
format	Journal Article
author	Bruhn, Miriam McKenzie, David
author_facet	Bruhn, Miriam McKenzie, David
author_sort	Bruhn, Miriam
title	Entry Regulation and the Formalization of Microenterprises in Developing Countries
title_short	Entry Regulation and the Formalization of Microenterprises in Developing Countries
title_full	Entry Regulation and the Formalization of Microenterprises in Developing Countries
title_fullStr	Entry Regulation and the Formalization of Microenterprises in Developing Countries
title_full_unstemmed	Entry Regulation and the Formalization of Microenterprises in Developing Countries
title_sort	entry regulation and the formalization of microenterprises in developing countries
publisher	Oxford University Press on behalf of the World Bank
publishDate	2016
url	http://hdl.handle.net/10986/24188
_version_	1764455879160102912

Entry Regulation and the Formalization of Microenterprises in Developing Countries

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