Research on Dealing with Construction Permits

Doing Business considers the following list of papers as relevant for research on dealing with construction permits. Some papers—denoted with an asterisk (*)—use Doing Business data for their empirical analysis. If we have missed any important research, please let us know.

Author(s): Kevin Poel, Wim Marneffe, Samantha Bielen, Bas van Aarle, Lode Vereeck

Journal:  Journal of Business Administration Research

Abstract: Administrative burdens stemming from regulations are a worldwide cause of concern for policy-makers. Reducing administrative burdens has become an important policy objective in economic growth strategies for many governments. The European Commission set out a policy goal of reducing administrative burdens by 25% by 2012, although the literature provides limited evidence of its impact. Therefore, this paper examines the impact of administrative burdens on growth by using 6 business regulation variables for a panel of 182 countries. The results from the fixed effect regression analysis suggest that reducing administrative burdens in certain policy areas spurs economic growth. In particular, reducing burdens concerning start-ups and paying taxes enhances growth significantly. Furthermore, using a panel of 26 European countries, our results suggest that reducing the administrative burdens by 25% has a positive effect on growth of 1.62 % in the European Union.

Author(s): M Kapelko, A Oude Lansink, SE Stefanou

Journal: European Journal of Operational Research

Abstract: This paper undertakes the full decomposition of dynamic cost inefficiency into technical, scale and allocative inefficiency based on the dynamic directional distance function. The empirical application estimates dynamic inefficiency in the Spanish construction industry before and during the current financial crisis over the period 2001?2009. Static inefficiency measures are biased in a context of a significant economic crisis with large investments and disinvestments as they do not account for costs in the adjustment of quasi-fixed factors. Allocative inefficiency is smaller, while technical inefficiency is larger when using the dynamic compared to the static framework. Results further indicate that overall dynamic cost inefficiency is very high with technical inefficiency being the largest component, followed by allocative and scale inefficiency. Moreover, overall dynamic cost inefficiency is significantly larger before the beginning of the financial crisis than during the financial crisis. Larger firms are less technically and scale inefficient than smaller firms on average, but have more problems in choosing the mix of inputs that minimizes their long-term costs. Firms that went bankrupt, on average, have a higher overall dynamic cost inefficiency and scale inefficiency than continuing firms.

Author(s): Aart Kraay; Norikazu Tawara

Journal: Journal of Economic Growth, Volume 18,Pages 253-283, June 2013

Abstract: Several detailed cross-country datasets measuring specific policy indicators relevant to business regulation and government integrity have been developed in recent years. The promise of these indicators is that they can be used to identify specific reforms that policymakers and aid donors can target in their efforts to improve the regulatory and institutional environment. Doing so, however, requires evidence on the partial effects of the many specific policy choices reflected in such datasets. In this paper we use Bayesian Model Averaging (BMA) to document the cross-country partial correlations between detailed policy indicators and several measures of regulatory and institutional outcomes. We find major instability in the set of policy indicators identified by BMA as important partial correlates of similar outcomes: specific policy indicators that matter for one outcome are, on average, not important correlates of other closely-related outcomes. This finding illustrates the difficulties in using highly-specific policy indicators to identify reform priorities using cross-country data.

Author(s): Kenny, Charles

Journal: Policy, Research working paper ; no. WPS 4271, World Bank, 2007

Abstract: The construction industry accounts for about one-third of gross capital formation. Governments have major roles as clients, regulators, and owners of construction companies. The industry is consistently ranked as one of the most corrupt: large payments to gain or alter contracts and circumvent regulations are common. The impact of corruption goes beyond bribe payments to poor quality construction of infrastructure with low economic returns alongside low funding for maintenance-and this is where the major impact of corruption is felt. Regulation of the sector is necessary, but simplicity, transparency, enforcement, and a focus on the outcomes of poor construction are likely to have a larger impact than voluminous but poorly enforced regulation of the construction process. Where government is the client, attempts to counter corruption need to begin at the level of planning and budgeting. Output-based and community-driven approaches show some promise as tools to reduce corruption. At the same time they will need to be complimented by a range of other interventions including publication of procurement documents, independent and community oversight, physical audit, and public-private anticorruption partnerships.

Author(s): Roozbeh Kangari

Journal: Civil Engineering and Environmental Systems, Volume 5, Issue 3 September 1988 , pages 114 - 120

Abstract: Today's construction industry involves more dynamic and uncertain planning than ever before. To approach complex problems in construction management, decision-makers should follow a systematic and professional approach in risk management. This paper explores the application of knowledge-base and database systems, and fuzzy sets in construction risk management. An integrated knowledge system is presented.

Author(s): Pedro Gete

Journal: DB Conference paper

Abstract: This paper studies how the costs and time lags to obtain construction permits affect the response of aggregate consumption, employment in construction and house prices to inter-est rate shocks. First, I document heterogeneity in those costs among OECD economies with similar levels of mortgage development. Second, I use a general equilibrium model to derive sign restrictions that allow to identify interest rate shocks. Third, I estimate vector autoregressions and identify exogenous interest rate shocks using the theory-consistent sign restrictions. Then, I compare the effects of the shocks in a sample of countries which are heterogeneous in the costs of obtaining the permits. The results show that reduction sin interest rates stimulate less the economy in countries with higher costs of obtaining the construction permits. Moreover, the reaction of the economy to interest rate changes is more delayed the longer the time needed to obtain the permits. I discuss the implications of these results for policymakers.

Author(s): Michal Lyons, Alison Brown, Colman Msoka

Journal: Urban Studies

Abstract: The World Bank's Doing Business reforms were originally expected to help the growth and formalisation of SMEs and micro enterprises. The expectations that reforms would support the growth and development of SMEs were challenged by scholars, but the reforms' impact on the micro enterprises of the poor has received little scholarly attention. Drawing on a desk study and on field studies of street-vendors carried out in Tanzania in 2007 and 2011, this paper argues that the growth and formalisation of micro-businesses are badly served by the Doing Business reforms.

Author(s): Biljana Jovanovic; Branimir Jovanovic

Journal: DB Conference paper

Abstract: This study investigates if ease of doing business, measured through the Doing Business indicators of the World Bank, affects investment in 28 economies from Eastern Europe and Central Asia. Results point out that it seems to have a positive effect on foreign direct investment from OECD countries - eight of the nine sub-groups of indicators appear signifcant. The effects on the total investment seem somewhat smaller - only three of the nine sub-groups are signifcant in the regressions where the dependent variable are the total investment.

Author(s): Hallward-Driemeier, Mary; Pritchett, Lant

Journal: The Journal of Economic Perspectives

Abstract: What happens in the developing world when stringent regulations characterizing the investment climate meet weak government willingness or capability to enforce those regulations? How is business actually done? The Doing Business project surveys experts concerning the legally required time and costs of regulatory compliance for various aspects of private enterprise' starting a firm, dealing with construction permits, trading across borders, paying taxes, getting credit, enforcing contracts, and so on around the world. The World Bank's firm-level Enterprise Surveys around the world ask managers at a wide array of firms about their business, including questions about how long it took to go through various processes like obtaining an operating license or a construction permit, or bringing in imports. This paper compares the results of three broadly comparable indicators from the Doing Business and Enterprise Surveys. Overall, we find that the estimate of legally required time for firms to complete a certain legal and regulatory process provided by the Doing Business survey does not summarize even modestly well the experience of firms as reported by the Enterprise Surveys. When strict de jure regulation and high rates of taxation meet weak governmental capabilities for implementation and enforcement, we argue that researchers and policymakers should stop thinking about regulations as creating 'rules' to be followed, but rather as creating a space in which 'deals' of various kinds are possible.

Author(s): Pilar Sanchez-Bella,Francisco Vazquez Grande

Journal: DB Conference paper

Abstract: This paper explores the interaction of FDI and regulation on individual characteristics of entrepreneurs, and how these affect engagement in entrepreneurial activities. We use data at theindividual level across developed and developing countries as well as macro investment flows and regulation at the country level between 2001 and 2008. We find that FDI has a moderate impact influencing the relevance of individual characteristics to the likelihood of becoming an entrepreneur, and that this effect is homogeneous across countries with different measures of regulatory burden. The effect of lagged FDI is more pronounced than current FDI, and it affects more individuals that become entrepreneurs to take advantage of a business opportunity as opposed of those who do so for lack of another job. The individual characteristics impacted the most by FDI are self-assessed skills and college level education. On the other hand, burdensome regulation has a negative effect over the relevance of individual characteristics to the likelihood of becoming an entrepreneur. When interacting together, the positive effects of lagged FDI and the negative effects of burdensome regulation neutralize each other.

Author(s): Gaoussou DIARRA

Journal: DB Conference paper

Abstract: This paper examines the extent to which variations in doing business (DB) performances in developing countries could be explained by variations in three external capital inflows: Official Development Assistance (ODA), Foreign Direct Investment (FDI) and Migrants? Remittance (MR). The evolution of individual indicators of DB developed by the World Bank have been analyzed using three key performance indicators (KPI): KPI1 (evolution of within-performance), KPI2 (evolution of distances to the frontier) and KPI3 (number of DB reforms). Econometric investigations show that each of these three external capital inflows has positive and statistically significant influences on the evolution of within and between performances of some aspects of DB. Only remittances and FDI have significant influences on the number of reforms in the field of starting business while only ODA influences that of the fields of permits of construction, electricity, property and insolvency. Trade reforms are found to be significantly influenced only by FDI. Depending on KPI and DB fields considered, these foreign financings could be substitutes or complements. In terms of size, ODA, and more specifically business ODA, have the strongest effects, followed by FDI and remittances.

Author(s): JI Haidar, T Hoshi 

Journal: Unknown

Abstract: Improving the environment for business is an important part of the growth strategy of Abenomics. As the KPI (Key Performance Indicator) for this effort, the Abe Administration aims to improve Japan?s rank in the World Bank Doing Business Ranking from the current #15 among high-income OECD countries to one of the top three. This paper clarifies what it takes for Japan to be among top three countries in terms of ease of doing business. By looking at details of the World Bank Doing Business ranking, we identify various reforms that Japan could implement to improve the ranking. Then, we classify the reforms into four groups depending on whether the reform requires legal changes and whether the reform is likely to face strong political resistance. By just doing the reforms that do not require legal changes and are not likely to face strong political opposition, Japan can improve the ranking to 9th. To be in the top 3, Japan would need to implement all the reforms except for those that require changing the laws and are likely to face strong political resistance, even under the unrealistic assumption that the other countries do not reduce the cost of doing business. Thus, in order to be one of the top three countries among OECD countries in terms of ease of doing business, Japan would most likely need to carry out all the reforms identified in this paper.

Author(s): Wolfgang Veit

Journal: Work in progress report; Schmalenbach School of Business and Economics

Abstract: Firms consider the risks from regulatory change as a major challenge. The literature provides a num-ber of social, political and economic indicators that describe the level of political and regulatory risk. Of these, ten risk drivers and structural variables are adopted for the present research. The drivers are tested based on data including 88 countries and 29 cost relevant indicators of business regulation. De-spite some significant correlations between drivers and reform of business regulation, regression re-sults do not support the hypothesis that the drivers found in the literature are consistently linked to regulatory change. The lack of association between the assumed determinants of regulatory change and the intensity of regulatory change is confirmed by factor analysis and cluster analysis performed on a selection of the drivers used in the regression analysis. The domestic policy-making process is suggested for further analysis of regulatory change.

Author(s): Caroline Freund;Mary Hallward-Driemeier and Bob Rijkers

Journal: World bank Group Policy Research Working Paper 6949

Abstract: This paper examines whether demands for bribes for particular government services are associated with expedited or delayed policy implementation. Ceteris paribus, firms confronted with demands for bribes take approximately 1.5 to 1.8 times longer to get a construction permit, and 1.5 to 1.6 longer to get an operating license or electrical connection than firms that did not have to pay bribes. Moreover, bribe requests are associated with significantly larger intra-firm variability in the time it takes to clear customs. Corruption is thus associated with regulatory uncertainty. Although larger firms face longer delays when confronted with bribes, the data reject the hypotheses that corruption results in expedited implementation for a favored few firms and that corruption is (less in)efficient when the de jure regulatory environment is burdensome.

Author(s): Marjan Petreski

Journal: Ekonomick? ?asopis (Journal of Economics), Volume 62, Issue 3, Pages 225-248

Abstract: The objective of this paper is to investigate the effect of the regulatory environment and the institutional quality on economic growth and the share of the informal economy in transition economies. We use a sample of 30 transition economies over the period 2005-2011 and observe the relationships within three geographic sub-groups, three regulatory sub-groups and pre- versus during the recent crisis. Results suggest that less cumbersome regulation improves growth if combined with better institutions. Both channels ? the direct one working via firm creation and the indirect one working via informal economy reduction ? are found to exert positive and significant effect on growth. The composite effects are the strongest for countries with less business-friendly regulations and institutional environment, for regulatory chapters potentially relevant for the entire life-cycle of the firm, such as investors? protection, contract enforcement and trade, and during the crisis.

Author(s): Erick Ariel Gonzales Rocha

Journal: Procedia Economics and Finance, Volume 4 ,Pages 335 ? 349, 2012

Abstract: According to the study Voices of the Poor from the World Bank, poor people expect to escape poverty through ?income from their own business or wages earned in employment?. A streamlined business environment supporting the sustainable development of small and medium enterprises (SMEs) may contribute to improve the living conditions of low income households in terms of employment opportunities. The paper tries to determine if having a larger SME sector is the result of competitive or constraining business environments. Applying an OLS estimation of a multiple linear regression model using cross-country data, the study attempts to assess how much of the cross-country variation in the contribution to employment and the size of the SME sector in the economy can be explained by cross-country variation in business environment regulations. The estimation results show that low entry costs, easy access to finance, and good levels of business sophistication and innovation predict a larger SME sector. There is a weak association with high exit costs as well. A productive and competitive SME sector must be associated with sophisticated and innovative business environments, in that sense the paper tries to contribute a basis for gauging this approach.

Author(s): Ghaleb J. Sweis; Rateb J. Sweis; Muhannad A. Al-Shboul; Ghadeer A. Al-Dweik 

Journal: International Journal of Information Technology Project Management

Abstract: Despite the advances and the developments of technology, research investigating the impact of Information Technology adoption on the quality of construction projects has been limited. Therefore, the purpose of this study is to examine the impact of Information Technology adoption on the quality of Jordanian construction projects. Measures and analysis procedures were survey based. Ninety questionnaires were distributed among different construction companies to study the impact of (IT) adoption on the quality of the project during the four phases of construction. Descriptive statistics were obtained and regression test was applied. Results indicate that more investment and encouragement of the use of (IT) in the construction sector essentially increase the quality of the project in the construction throughout its four phases (Planning, Design, Construction and Finishing). The main limitation of this study is that it is conducted with a convenience sample. The academic and managerial implications of the findings are discussed and further research directions are offered.

Author(s): Zia Qureshi;Jose L. Diaz-Sanchez;Aristomene Varoudakis

Journal: Global Journal of Emerging Market Economies

Abstract: This article constructs indicators of structural bottlenecks arising from barriers to open markets,obstacles to business operations, and constraints to access to finance. Empirical evidence from a sampleof 30 emerging economies indicates that barriers to open markets and access to finance are significantlyassociated with differences in total factor productivity growth in the post-global financial crisis periodcompared with the pre-crisis period?with countries with fewer barriers showing stronger recoveryand resilience. Barriers to access to finance are also associated with differences in the performanceof private investment. Reforms to improve the policy framework in these areas, up to the level of thebest-ranking countries, could offset the recently observed growth slowdown in emerging economies.These reforms would revitalize potential growth and mitigate the risks from external shocks associatedwith the global environment in the transition from the global financial crisis.

Author(s): Antonio Cappiello

Journal: Rivista Italiana di Economia Demografia e Statistica

Abstract: The Doing Business (DB) Project of the World Bank, since 2002, aims to measure business regulations and their enforcement across 189 economies. The purpose of this report is to collect and analyse quantitative data to compare business regulation environments across economies and over time. Countries are ranked on the basis of 10 indicators that are synthetized in order to obtain that the final rank (Ease of Doing Business). Each indicator, in its turn, is composed of sub-indicators; for instance, the Registering Property indicator is composed of the following sub-indicators: time, procedures and costs. In the following paragraphs the following items are analysed: the rank methodology adopted with an example of the percentile rank calculation for the indicators, a deeper focus on the score assignment criteria for the time indicator and the analysis of the potential biases and paradox emerging from the application of these criteria.