Measuring the cost of red tape

Authors: Doing Business
Published: May 2015
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This note estimates the costs to firms from inefficient business regulations. Using the Doing Business data, we identify the time it takes in countries around the world for 6 major transactions regulated by governments: starting a business, transferring property, paying business taxes, exporting goods, importing goods and using courts to resolve a commercial dispute. We also use the Doing Business data to identify the best practice in efficient regulation of these transactions. To identify the number of firms potentially affected by these transactions, we use the World Bank’s Entrepreneurship Database. Based on these data, we estimate that if the governments of 90 economies had applied best practice in regulating business entry in 2012, more than 45 million days of entrepreneurs’ time could have been saved.