Deals versus Rules : Policy Implementation Uncertainty and Why Firms Hate It

Hallward-Driemeier, Mary ; Khun-Jush, Gita ; Pritchett, Lant

关键词: ASSETS;    BRANCH;    BRIBE;    BRIBERY;    BRIBES;   

DOI  :  10.1596/1813-9450-5321
RP-ID  :  WPS5321

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Firms in Africa report "regulatoryand economic policy uncertainty" as a top constraint totheir growth. This paper argues that often firms in Africado not cope with policy rules, rather they face deals:firm-specific policy actions that can be influenced by firmactions (such as bribes) and characteristics (such aspolitical connections). Using Enterprise Survey data, thepaper demonstrates huge variability in reported policyactions across firms notionally facing the same policy. Thewithin-country dispersion in firm-specific policy actions islarger than the cross-national differences in averagepolicy. The analysis shows that variability in this policyimplementation uncertainty within location-sector-size cellsis correlated with firm growth rates. These measures ofimplementation variability are more strongly related tolower firm employment growth than are measures of"average" policy action. The paper shows that thede jure measures such as Doing Business indicators arevirtually uncorrelated with ex-post firm-level responses,further evidence that deals rather than rules prevail inAfrica. Strikingly, the gap between de jure and de factoconditions grows with the formal regulatory burden. Theevidence also shows more burdensome processes open up morespace for making deals; firms may not incur the officialcosts of compliance, but they still pay to avoid them.Finally, measures of institutional capacity and bettergovernance are closely associated with perceived consistencyin implementation.