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Abstract:
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This analysis examines how the regulation of entry effects macroeconomic growth in 101 countries. The data address the number of procedures required to register a new business, the cost of completing the registration process, and the time it takes a new entrant to register the new business. On average, the costs associated with registering a new business are higher in lower income countries than in higher income countries, as are the procedural and time requirements to complete the registration process. The empirical results of this analysis show a negative relationship between the number of procedures required to start a business and GDP per capita. Moreover, contrary to the preliminary tests, the findings show that the costs of regulation are positively associated with economic output. Overall these conclusions do not show clear support for either public choice or public interest theories of regulation, but rather a balance of the two. |