2014年-世界发展银行全球_Entry_Regulation_and_the_Formalization_of_Microenterprises_in_Developing_Countries_16页_199kb

Summary of Entry Regulation and the Formalization of Microenterprises in Developing Countries

Core Content

This paper explores the effectiveness of entry regulations and formalization policies in encouraging microenterprises in developing countries to become formal. It critically examines the impact of regulatory reforms, information provision, cost reductions, and enforcement on the formalization process. The findings suggest that while reforms have reduced the time and cost of starting a business, the majority of microenterprises still remain informal, and the benefits of formalization are not universally perceived.

Main Viewpoints

• Informality is widespread: Despite significant regulatory reforms over the past decade, the majority of microenterprises in developing countries remain informal.
• Formalization is not universally beneficial: Many small informal firms do not gain substantial benefits from formalizing, and thus do not have an incentive to do so.
• Entry reforms have limited impact: Simplifying the process of registering a business leads to only a modest increase in the number of formal firms.
• Enforcement may be more effective: Increased enforcement of existing regulations, such as tax and labor inspections, has a more noticeable effect on formalization rates than reducing entry barriers.
• Firms are heterogeneous: Some informal firms may be more inclined to formalize if they perceive greater benefits, while others are less motivated due to low productivity or lack of incentives.

Key Information

Regulatory Reforms and Their Impact

• Over 368 reforms were implemented globally between 2003 and 2012, reducing the time to start a business from 50 to 30 days and cutting costs by one-third.
• In Mexico, a one-stop shop reform reduced the time to start a business from 30.1 to 1.4 days, leading to a 5% increase in registered business owners.
• In Brazil, the Minas Fácil Expresso program aimed to extend the one-stop shop benefits to less populous areas but resulted in a decrease in registrations during the first two months, with no long-term increase.
• In Colombia, a one-stop shop reduced registration time from 55 to under 9 days and lowered fees by 30%, leading to a 5% increase in business registrations.

Information and Cost Reductions

• Providing information about the formalization process or reducing costs has had limited success in increasing formalization rates.
• In Sri Lanka, a randomized experiment offering cost reimbursement and information to informal firms resulted in only 1 out of 104 firms formalizing.
• In Belo Horizonte, Brazil, a package of information and waived costs led to only one firm formalizing out of 255.
• In Lima, Peru, a 27–35% subsidy on municipal license costs led to 10–12% of informal firms obtaining a license.

Enforcement and Formalization

• Increased enforcement (e.g., municipal inspections) has a more significant impact on formalization than cost reduction or information provision.
• In Belo Horizonte, Brazil, firms that received municipal inspections were 22–27% more likely to formalize.
• In Chile, letters indicating increased audit probability raised the median declared income by 12%.
• In China, the introduction of a tax receipt lottery increased sales tax revenue by 17%.
• In Brazil, increased labor enforcement led to a reduction in formal wages but an increase in formal sector employment.

The Role of Ongoing Costs

• The ongoing costs of formalization, including taxes, accounting, and other administrative expenses, often outweigh the initial cost savings from simplified registration.
• This suggests that even if the entry process is made easier, the decision to formalize is influenced by the long-term costs and benefits of being formal.

Conclusion

• The paper concludes that while reducing entry barriers and providing information can have some effect, the majority of small-scale informal firms do not benefit sufficiently from formalization to justify the costs.
• Enforcement appears to be a more effective tool in increasing formalization, especially in the tax and labor domains.
• Policymakers should consider whether there is a compelling public rationale for formalizing subsistence enterprises, as the private incentives for these firms are often weak.

Summary of Key Studies

Final Notes

• The paper emphasizes the need for policy differentiation, as not all informal firms are the same.
• Regulatory enforcement may be a more effective strategy than simplifying entry procedures.
• The net cost of formalization is a critical determinant of whether firms choose to formalize.
• The private incentives for formalization are often limited, especially for small and subsistence enterprises.