The impact of regulation on growth and informality: cross-country evidence

Loayza, Norman; Oviedo, Ana María; Servén, Luis

doi:10.1093/0199204764.003.0007

Cited by 92 publications

(101 citation statements)

References 8 publications

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“…In line with the theoretical model, the public sector covariates are allowed to have some contemporaneous feedbacks on the error term, and following Dollar and Kraay (2004), Loayza et al (2005) and Chang et al (2009), the generalised method of moments (GMM) procedure that addresses endogeneity and controls for unobserved country specific factors is used. Thus, estimates of elasticities for policy variables that are, in principle, subject to improvement through economic and institutional reforms are provided.…”

Section: Introductionmentioning

confidence: 99%

Government Spending, Corruption and Economic Growth

2016

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This paper considers the effects of corruption and government spending on economic growth. It starts from an endogenous growth model and extends it to account for the detrimental effects of corruption on the potentially productive components of government spending, namely military and investment spending. The resulting model is estimated on a sample of African countries and the results show, first, that the growth rate is strongly influenced by the interaction between corruption and military burden, with the interaction between corruption and government investment expenditure having a weaker effect. Second, allowing for the cyclical economic fluctuations in specific countries leaves the estimated elasticities close to those of the full sample. Third, there are significant conditioning variables that need to be taken into account, namely the form of government, political instability and natural resource endowment. These illustrate the cross country heterogeneity when accounting for quantitative direct and indirect effects of key variables on economic growth. Overall, these findings suggest important policy implications.

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Section: Introductionmentioning

confidence: 99%

Government Spending, Corruption and Economic Growth

2016

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“…However, in literature, a lot of reasons have been ascribed to business entry barriers. These range from costly regulations and long procedures (Loayza et al [8], Klapper et al [9], Obamuyi [10]), lack of access to funds, corruption, and unfavourable business environments. Some studies found out that reducing the registration cost and removing entry barriers could reduce informality.…”

Section: Literature Reviewmentioning

confidence: 99%

Effects on the Registration and Licensing of Microenterprises in an Informal Economy: Further Evidence From the Ota Area, Nigeria

Bowale¹,

Odukoya²,

Alege³

et al. 2017

WIT Transactions on Ecology and the Environment

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This study examined the effects of business formality on microenterprises in an informal economy, with particular reference to the Ota area in Ogun State, Nigeria. This study area reflects the typical Nigerian business environment with all the characteristics of an informal economy. Data were collected using questionnaires from a sample of 200 microenterprises. The owners of 161 microenterprises responded (81 per cent response rate). The sampling frame for the survey consisted of microenterprises that employ no more than 10 workers. Five lines of businesses were identified for the survey. These included light manufacturing, trading, agro-allied, vocation and professional services. These businesses provided a good representation of the self-employed and small employers in the study area. The questionnaire comprised three sections: a socio-demographic profile in section A, the businesses characteristics of the microbusinesses in Section B, and the underlying factors that influence the capacity of small and medium-sized enterprises to generate income in section C. The data collected were analysed using descriptive statistics. A probit model was used to estimate the identified variables. The results showed that most (69%) of the microenterprises surveyed were owned by males. The main business in the area was trading. The results also revealed that most (65%) of the enterprises have been in operation for more than five years. It was also discovered that the majority of the business owners had not registered their businesses with government agencies; instead, most of them had registered with local organizations. Few of them (35%) had licensed their businesses. Furthermore, the results showed that gender (coef. = 0.394, p < 0.01) and business focus (coef. = 0.297, p < 0.05) were significant factors determining the income generation potential of microenterprises. However, business type, business registration, licensing, age of business, educational level, and age of owners were not significant in determining the income generation of the firms. The study concluded that business formality (registration and licensing) has no significant effect on the income-generation potential of microenterprises in the Ota area, Nigeria.

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“…2 Loayza et al (2005) argue that a heavier regulatory burden, particularly in product and labour markets, reduces growth and induces informality. They conclude, however, that these effects can be mitigated as the overall institutional framework improves.…”

Section: Notesmentioning

confidence: 99%

“…This view of informality is well-established and can be traced back to the work of Hart (1972). A final view (and one which we do not address in the present paper) concerns the relationship between informality and illegal or tax-evading activity (see Gerxhani, 2004, andLoayza et al, 2005). 2 Each of these alternative views shares in common the idea that informal activity may be freely chosen by some workers.…”

Section: Introductionmentioning

confidence: 99%

On Defining And Measuring The Informal Sector

Henley¹,

Arabsheibani²,

Carneiro³

2006

Policy Research Working Papers

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The impact of regulation on growth and informality: cross-country evidence

Cited by 92 publications

References 8 publications

Government Spending, Corruption and Economic Growth

Government Spending, Corruption and Economic Growth

Effects on the Registration and Licensing of Microenterprises in an Informal Economy: Further Evidence From the Ota Area, Nigeria

On Defining And Measuring The Informal Sector

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