Publication: Using Administrative Data to Evaluate Municipal Reforms : An Evaluation of the Impact of Minas Fácil Expresso
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Published
2013-07-04
ISSN
1943-9342
Date
2013-08-27
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This study uses administrative data to evaluate the impact of Minas Fácil Expresso, a programme in the State of Minas Gerais, Brazil, which expanded a business start-up simplification programme to more remote municipalities. Using difference-in-differences with 56 months of registration data for 822 municipalities, the analysis finds introducing the programme actually led to a reduction in registration rates, and no change in tax revenues. The paper uses this evaluation to illustrate the design choices and the issues involved in using administrative data to evaluate reforms, also providing a template that can be used for evaluating similar reforms elsewhere.
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Publication Using Administrative Data to Evaluate Municipal Reforms : An Evaluation of the Impact of Minas Facil Expresso(World Bank, Washington, DC, 2013-02)Efforts to make it easier for firms to register formally are the most common form of business regulatory reform over the past decade. While there is evidence that large reforms have resulted in some increases in registration rates, recent experimental evidence suggests very few informal firms choose to register when given information about how to do so. This raises the question of whether it is productive for governments to continue to extend simplification efforts to all firms, especially those in more remote areas where many of the benefits of registering may be reduced. This study uses administrative data to evaluate the impact of Minas Facil Expresso, a program in the state of Minas Gerais, Brazil, which attempted to expand a business start-up simplification program to more remote municipalities. Using difference-in-differences with 56 months of registration data for 822 municipalities, the analysis finds introducing these units actually led to a reduction in registration rates, and no change in tax revenues. The paper uses this evaluation to illustrate the design choices and issues involved in using administrative data to evaluate reforms, with the goal of also providing a template that can be used for evaluating similar reforms elsewhere.Publication The Impact of Expanding Simplified Start-up Procedures to More Remote Areas : The Minas Facil Expresso Program(World Bank, Washington, DC, 2013-02)This note shows how the rich administrative data collected by many governments can be used to evaluate a policy reform, and provides an example where impact evaluation reveals that a policy didn t work as well as intended.Publication Entry Regulation and Formalization of Microenterprises in Developing Countries(World Bank, Washington, DC, 2013-06)The majority of microenterprises in most developing countries remain informal despite more than a decade of reforms aimed at making it easier and cheaper for them to formalize. This paper summarizes the evidence on the effects of entry reforms and related policy actions to promote firm formalization. Most of these policies result only in a modest increase in the number of formal firms, if at all. Less is known about the impact of other forms of business regulations on the performance of low-scale enterprises. Most informal firms appear not to benefit on net from formalizing, so ease of formalization alone will not lead to most of them formalizing. Increased enforcement of rules can increase formality. Although there is a fiscal benefit of doing this with larger informal firms, it is unclear whether there is a public rationale for trying to formalize subsistence enterprises.Publication A Helping Hand or the Long Arm of the Law? Experimental Evidence on What Governments Can Do to Formalize Firms(World Bank, Washington, D.C., 2013-05)Many governments have spent much of the past decade trying to extend a helping hand to informal businesses by making it easier and cheaper for them to formalize. Much less effort has been devoted to raising the costs of remaining informal, through increasing enforcement of existing regulations. This paper reports on a field experiment conducted in Belo Horizonte, Brazil, in order to test which government actions work in getting informal firms to register. Firms were randomized to a control group or one of four treatment groups: the first received information about how to formalize; the second received this information and free registration costs along with the use of an accountant for a year; the third group was assigned to receive an enforcement visit from a municipal inspector; while the fourth group was assigned to have a neighboring firm receive an enforcement visit to see if enforcement has spillovers. The analysis finds zero or negative impacts of information and free cost treatments, and a significant but small increase in formalization from inspections. Estimates of the impact of actually receiving an inspection give a 21 to 27 percentage point increase in the likelihood of formalizing. The results show most informal firms will not formalize unless forced to do so, suggesting formality offers little private benefit to them. But the tax revenue benefits to the government of bringing firms of this size into the formal system more than offset the costs of inspections.Publication Entry Regulation and the Formalization of Microenterprises in Developing Countries(Oxford University Press on behalf of the World Bank, 2014-08-05)The majority of microenterprises in most developing countries remain informal despite more than a decade of reforms aimed at making it easier and cheaper for them to formalize. This paper summarizes the evidence on the effects of entry reforms and related policy actions to promote firm formalization. Most of these policies result in only a modest increase in the number of formal firms, if there is any increase at all. Most informal firms appear to not benefit on net from formalizing. As a consequence, ease of formalization along will not induce most of them to become formal. Increased enforcement of rules can increase formality. Although there is a fiscal benefit of doing this with larger informal firms, it is unclear whether there is a public rationale for attempting to formalize subsistence enterprises.
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