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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.


  • Can specific policy indicators identify reform priorities?

    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

  • Construction, corruption, and developing countries

    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

  • Dealing with construction permits, interest rateshocks and macroeconomic dynamics

    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.

  • Ease of doing business and investment in eastern europe and Central Asia

    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.

  • How business is done in the developing world: deals versus rules

    Author(s) : Hallward-Driemeier, Mary; Pritchett, Lant Journal : Journal of Economic Perspectives 29(3): 121-40 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.

  • How does FDI and regulation interact with entrepreneurship?

    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.


  • Implementing structural reforms in abenomics: how to reduce the cost of doing business in Japan

    Author(s) : JI Haidar,T Hoshi Journal : NBER Working Paper 21507, National Bureau of Economic Research Abstract : Improving the environment for business is an important part of the growth strategy of Abenomics. As the goal for this effort, the Abe Administration aims to improve Japan’s rank in the World Bank Doing Business Ranking to one of the top three among OECD. This paper clarifies what it takes for Japan to achieve the goal. 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 six groups depending on whether the reform requires legal changes and on political resistance that the reform is likely to face. 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 13th. To be in the top 3, Japan would need to implement all the reforms that are not likely to face strong political resistance. The conclusions, however, are based on the assumption that the conditions in the other countries do not change, which is unrealistic. Thus, Japan would need to carry out all the reforms including those with high political resistance to be among the top three.

  • Predictably protracted firm-level evidence on corruption and policy implementation times

    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. The “grease the wheels” hypothesis, which contends that bribes act as speed money, implies three testable predictions. First, on average, bribe requests should be negatively correlated with wait times. Second, this relationship should vary across firms, with those with the highest opportunity cost of waiting being more likely to pay and face shorter delays. Third, the role of grease should vary across countries, with benefits larger where regulatory burdens are greatest. The data are inconsistent with all three predictions. According to the preferred specifications, ceteris paribus, firms confronted with demands for bribes take approximately 1.5 times longer to get a construction permit, operating license, or electrical connection than firms that did not have to pay bribes and, respectively, 1.2 and 1.4 times longer to clear customs when exporting and importing. The results are robust to controlling for firm fixed effects and at odds with the notion that corruption enhances efficiency.

  • Regulatory environment and development outcomes: empirical evidence from transition economies

    Author(s) : Marjan Petreski Journal : Ekonomick Chasopis (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.

  • Assessing dynamic inefficiency of the Spanish construction sector pre- and post-financial crisis

    Author(s) : Kapelko, Magdalena, Alfons Oude Lansink, and Spiro E. Stefanou Journal : European Journal of Operational Research 237(1): 349-57 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.