Publication:
How Should the Government Bring Small Firms into the Formal System? Experimental Evidence from Malawi

Simple item page
dc.contributor.authorCampos, Francisco
dc.contributor.authorGoldstein, Markus
dc.contributor.authorMcKenzie, David
dc.date.accessioned2018-10-04T20:58:40Z
dc.date.available2018-10-04T20:58:40Z
dc.date.issued2018-10
dc.description.abstractDeveloping country governments seek to reduce the pervasive informality of firms for multiple reasons: increasing the tax base, helping firms access formal markets and grow, increasing the rule of law, and as a means to obtain data that can be used for other government functions. However, there is debate as to the best approach for achieving these goals. This study conducted a randomized experiment in Malawi to test three alternatives: (a) assisting firms to obtain a business registration certificate that offers access to formal markets but imposes no tax obligations; (b) assisting firms to obtain business registration and tax registration; and (c) supplementing the assistance to obtain business registration with a bank information session intended to help firms utilize one of the key potential benefits of formalizing. The study finds incredibly high demand for obtaining a formal status that is separate from tax obligations, and very low take-up of tax registration. Business registration alone has no impact on access to formal markets or firm performance. However, coupling registration assistance with the bank information session increases the use of formal financial services, and results in increases in firm sales by 20 percent and profits by 15 percent. The results highlight the advantages of separating business and tax registration, but also the need to assist firms in benefiting from their new formal status.en
dc.identifierhttp://documents.worldbank.org/curated/en/880711538673183990/How-Should-the-Government-Bring-Small-Firms-into-the-Formal-System-Experimental-Evidence-from-Malawi
dc.identifier.doi10.1596/1813-9450-8601
dc.identifier.urihttps://hdl.handle.net/10986/30510
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 8601
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectINFORMALITY
dc.subjectBUSINESS REGISTRATION
dc.subjectTAXATION
dc.subjectACCESS TO FINANCE
dc.subjectSMALL AND MEDIUM ENTERPRISES
dc.subjectMICROENTERPRISE
dc.subjectGOVERNMENT
dc.subjectTAX REGISTRATION
dc.subjectREGULATION
dc.subjectBANKING
dc.subjectFIRM PERFORMANCE
dc.subjectFINANCIAL SERVICES
dc.subjectGENDER INNOVATION LAB
dc.subjectAFRICA GENDER POLICY
dc.subjectWOMEN AND PRIVATE SECTOR DEVELOPMENT
dc.titleHow Should the Government Bring Small Firms into the Formal System? Experimental Evidence from Malawien
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleHow Should the Government Bring Small Firms into the Formal System? Experimental Evidence from Malawi
okr.date.disclosure2018-10-04
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/880711538673183990/How-Should-the-Government-Bring-Small-Firms-into-the-Formal-System-Experimental-Evidence-from-Malawi
okr.guid880711538673183990
okr.identifier.doi10.1596/1813-9450-8601
okr.identifier.externaldocumentum090224b0863edd8e_1_0
okr.identifier.internaldocumentum30472778
okr.identifier.reportWPS8601
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/880711538673183990/pdf/WPS8601.pdfen
okr.region.administrativeAfrica
okr.region.countryMalawi
okr.statistics.combined3379
okr.statistics.dr880711538673183990
okr.statistics.drstats2132
okr.topicPublic Sector Development::Tax Administration
okr.topicPrivate Sector Development::Business Development Services
okr.topicPrivate Sector Development::Enterprise Development & Reform
okr.topicPrivate Sector Development::Legal Regulation and Business Environment
okr.topicPrivate Sector Development::Microenterprises
okr.topicPrivate Sector Development::Small and Medium Size Enterprises
okr.unitOffice of the Chief Economist, Africa Region; and the Development Research Group, Development Economics
relation.isAuthorOfPublication442e6ddc-d567-5db8-8fea-62f71781ad6a
relation.isAuthorOfPublication148d6d6d-76e5-5d6f-9af9-98313e30551f
relation.isAuthorOfPublication.latestForDiscovery442e6ddc-d567-5db8-8fea-62f71781ad6a
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
Files
Original bundle
Now showing 1 - 2 of 2
Thumbnail Image
Name:
WPS8601.pdf
Size:
1.08 MB
Format:
Adobe Portable Document Format
Download
No Thumbnail Available
Name:
WPS8601.txt
Size:
142.08 KB
Format:
Plain Text
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Plain Text
Description:
Download
Collections
Policy Research Working Papers