A Framework for Thinking about Enterprise Formalization Policies in Developing Countries
What policies encourage firms to become formal? The standard approach emphasizes reducing the costs of compliance with government regulation. This is unlikely to be sufficient. Instead we need to understand compliance as a function not only of firm...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/05/7639070/framework-thinking-enterprise-formalization-policies-developing-countries http://hdl.handle.net/10986/7103 |
| Summary: | What policies encourage firms to become
formal? The standard approach emphasizes reducing the costs
of compliance with government regulation. This is unlikely
to be sufficient. Instead we need to understand compliance
as a function not only of firm-level costs and benefits but
also in terms of the interaction between the firm and its
competitors and between the firm and the state. This paper
emphasizes the coordination and credibility issues involved
in promoting formalization and discusses possible
institutional solutions, among them business associations
that make the benefits of membership dependent on
compliance, information sharing arrangements among
government agencies and improvements in the quality of
public management. |
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