Publication: Less Burden, More Transparency, and Higher Quality: Electronic System for Business Safety Inspections in Peru
Date
2020-07-21
ISSN
Published
2020-07-21
Author(s)
Barron, Manuel
Bedoya, Guadalupe
Garcia Montufar, Diego
Goicoechea, Ana
Abstract
Business safety inspections are commonly
cited as one of the most important bureaucratic barriers to
doing business around the developing world (World Bank 2019,
2020). In Peru, the business safety inspection system is
characterized by low compliance with established norms,
misaligned incentives and high transaction costs. These
inefficiencies affect micro, small, and medium enterprises
(MSMEs) disproportionally, as they do not have the resources
or know-how to navigate the inspection procedures. MSMEs
constitute 99.5 percent of firms, employ up to 89 percent of
the population, and contribute up to 31 percent of gross
domestic product (GDP) in the country (Ministry of
Production 2017). Thus, the inefficiencies in the inspection
system hamper the business environment, adversely affecting
shared prosperity and economic growth. The World Bank Group
is conducting a rigorous impact evaluation study in
collaboration with the Ministry of Housing of Peru.1
Specifically, it will assess how the deployment of an
electronic system for inspections, in combination with the
improved monitoring of inspector performance and optimized
firm auditing, can be used to address key constraints in the
inspection system. This work will shed light on whether
these mechanisms can reduce the compliance burden on firms
by improving regulatory efficiency while also ensuring
safety. In addition, it will provide evidence about how such
systems could operate when implemented at scale. This note
provides an overview of the policy problem that Peru faces,
and describes the solutions to be tested. It then focuses on
lessons from developing and implementing the electronic
system to solve the policy problem, with an emphasis on
those lessons related to the constraints and inputs to
improving regulatory efficiency and accountability.
Citation
“Barron, Manuel; Bedoya, Guadalupe; Garcia Montufar, Diego; Goicoechea, Ana. 2020. Less Burden, More Transparency, and Higher Quality: Electronic System for Business Safety Inspections in Peru. Finance, Competitiveness and Innovation in Focus;. © World Bank, Washington, DC. http://hdl.handle.net/10986/34227 License: CC BY 3.0 IGO.”