The impact of business regulatory reforms on economic growth

• Published in: Journal of the Japanese and international economies Vol. 26; no. 3; pp. 285 - 307
• Main Author: Haidar, Jamal Ibrahim
• Format: Journal Article
• Language: English
• Published: Duluth Elsevier Inc 01-09-2012; Elsevier BV; Elsevier
• Subjects: Development; Doing Business; Economic growth; Economic reform; Economics and Finance; GDP; Gross Domestic Product; Growth; Growth rate; Humanities and Social Sciences; Institutions; Reform; Regulation; Regulations; Regulatory reform; Regulations; O12; O17; Growth; P48; Development; Reform; O50; Doing Business; Institutions; Economic Growth
• ISSN: 0889-1583; 1095-8681
• DOI: 10.1016/j.jjie.2012.05.004

► Use a sample of 172 countries to investigate the link between reforms and growth. ► Provide evidence that business regulatory reforms are good for economic growth. ► Establish that each business regulatory reform is associated with a 0.15 percentage points increase in GDP growth rate.
I investigate the link between business regulatory reforms and economic growth in 172 countries. I create a 5year 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% increase in growth rate of GDP.