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SMEs

Out of the shadows? Are firms more likely to formalize through tax simplification programs?

Caio Piza's picture
Red tape can be a significant barrier to having informal firms formalize and eventually benefit from any business support programs provided by governmental agencies. While the relationship between this formalization, access to finance and a firm’s performance has been implied by anecdotal evidence (de Soto 1989 and 2000), a recent survey of empirical evidence suggests that such programs may in fact achieve the opposite and not necessarily nudge firms to formalize. In fact, the evidence suggests that even with a significant reduction in red tape most informal firms decide to remain informal (see Bruhn and McKenzie 2013 for a survey).
 

Myth or fact? New WDR examines the potential of digital technologies for development

Maja Andjelkovic's picture


Pop quiz: Which of these statements do you agree with?
 
  1. If you build “IT” they will come.
  2. Poor people don’t need mobile phones. They need clean water and food instead.
  3. Digital skills are only relevant for people who work in the ICT sector. The rest of us don’t need them.