Pitfalls to Avoid When Measuring Institutions: Is 'Doing Business' Damaging Business?

Posted: 21 Jan 2008

See all articles by Benito Arruñada

Benito Arruñada

Pompeu Fabra University - Department of Economics and Business; Barcelona GSE

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Abstract

Over recent years, both governments and international aid organizations have been devoting large amounts of resources to simplifying the procedures for setting up and formalizing firms. Many of these actions have focused on reducing the initial costs of setting up the firm, disregarding the more important role of business registers as a source of reliable information for judges, government departments and, above all, other firms. This reliable information is essential for reducing transaction costs in future dealings with all sorts of economic agents, both public and private. The priorities of reform policies should therefore be thoroughly reviewed, stressing the value of the legal institutions rather than trivializing them as is often the case.

Keywords: starting business, doing business, informal economy, company registers

JEL Classification: K22, K23, L59, O17

Suggested Citation

Arruñada, Benito, Pitfalls to Avoid When Measuring Institutions: Is 'Doing Business' Damaging Business?. Journal of Comparative Economics, Vol. 35, No. 4, pp. 729-747, 2007. Available at SSRN: https://ssrn.com/abstract=1085543

Benito Arruñada (Contact Author)

Pompeu Fabra University - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Department of Economics and Business
Barcelona, 08005
Spain
+34 93 542 25 72 (Phone)
+34 93 542 17 46 (Fax)

HOME PAGE: http://www.econ.upf.edu/~arrunada

Barcelona GSE ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

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