The Impact of Business Regulatory Reforms on Economic Growth
36 Pages Posted: 26 May 2012 Last revised: 14 Jun 2013
Date Written: May 25, 2012
I investigate the link between business regulatory reforms and economic growth in 172 countries. I create a five year dataset on business regulatory reforms from the World Bank’s Doing Business reports. Then, I test the hypothesis that business regulatory reforms increase economic growth, using data on micro-economic reforms. These data do not suffer the endogeneity issues associated with other datasets on changes in economic institutions. The results provide a robust support for the claim that business regulatory reforms are good for economic growth. The paper establishes that, on average, each business regulatory reform is associated with a 0.15 percent increase in growth rate of GDP.
Keywords: growth, reform, development, regulations, doing business, and institutions
JEL Classification: O12, O17, O50, P48
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