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Eastern Europe and Central Asia

Business Associations: Good for businesses, bad for taxpayers and consumers?

Mohammad Amin's picture

In The Rise and Decline of Nations, Mancur Olson argued that interest groups like business associations (BAs) always pursue distributive objectives, seeking unproductive rents rather than benefitting the public. Subsequent work on collective action culminating in the New Institutional Economics continued to adopt this negative view of BAs.

Crime, security and corruption in Africa

Mohammad Amin's picture

In previous posts, I discussed the crime and security situation for firms in Latin America and the Eastern Europe and Central Asia (ECA) region. I have begun rolling data from the Enterprise Surveys for 21 countries in Africa, and the initial results suggest that crime imposes  as heavy a burden on firms in Africa as in Latin America. On average, losses due to crime and security expenses average about 2.7% of the annual sales of a firm in Africa.

Is there more crime in low-income countries?

Mohammad Amin's picture

One might think that firms in low-income countries suffer more crime-related problems than those higher up the development ladder. Low income levels, higher unemployment and the haphazard development of urban centers in low-income countries might contribute positively to crime. Consequently, losses due to crime and expenses on security incurred by firms may be higher in these countries.

A crime against business in Eastern Europe

Mohammad Amin's picture

A previous post on this website provided evidence on the extent of crime in Latin America (LAC) using data from Enterprise Surveys. Evidence revealed that losses due to crime borne by the firms and the expenses they incurred on security (as % of firms’ annual sales) equaled 2.7% per annum.

The construction sector and crime

Mohammad Amin's picture

What are the sorts of firms that are most prone to crime? The question is important to properly understand how crime affects economic activity and how to direct crime prevention efforts across different target groups. I use firm-level data from twenty nine countries in the East Europe and Central Asia region (Business Environment and Enterprise Performance Survey (BEEPS), 2009) to explore the question.

Time spent dealing with regulations

The Enterprise Surveys team has just finished surveying firms in the region of Europe and Central Asia (ECA). (For those interested in taking a closer look at the data, you can download the firm-level data (after registering) here or get country-level calculations from the Custom Query tool.)

Big guy, little guy: Who suffers more from crime?

Mohammad Amin's picture

At first you might guess that it’s the big firms that make an easy target. But we need to do more than guess—the policy implications are quite different if the answer is “big” or “small.” If large firms are more efficient and do more R&D and export to other countries, then crime can be more harmful to the economy when directed against such firms. However, compared with large firms, wages and profits may be lower in the smaller firms. Crime directed against small firms can therefore be regressive (causing more harm to the relatively worse-off).

Should a one-time entry cost matter?

As I mentioned in my previous post, some critics have argued that too much attention is paid to the costs of starting a business. One way of stating the critique is that a cost that has to be paid only once ought not to have a big effect on a firm’s decisions.

Do we need to worry about enforcement of laws?

Mohammad Amin's picture

It goes without saying that rules, laws and regulations are meaningless if they are not enforced. Yet, the bulk of the literature on the effects of various laws is completely silent on the enforcement issue. The implicit assumption is that measures based on laws on the books are a reasonably good proxy for actual enforcement of laws and so an explicit reference to enforcement is not required. Is there any reason to think this is a plausible assumption?