This is a very informative blog post and a great research paper, congratulations! We have argued in a similar way regarding the gap between de jure regulation and their de facto implementation in the "Seven theses on Doing Business". http://www.die-gdi.de/CMS-Homepage/openwebcms3.nsf/(ynDK_contentByKey)/ANES-7VSG3L/$FILE/Seven%20theses.pdf What can be done? Is focusing on reducing regulatory requirements at all a good strategy to support private sector development in countries where bureaucracies are not working efficiently or are even benefiting from excessive regulation if this makes rent-seeking through informal deals with businesses possible? Considering the political economy of regulatory reforms it seems to me rather unlikely that these reforms will be successful in such an environment. Transforming a rent-seeking culture to a culture of service delivery requires a complex approach, rather technical reforms of regulations will probably not tackle this problem.