In a new working paper, our own Nihal Bayraktar and Yan Wang look at the links between banking sector openness and economic growth.
A small brewer in Sierra Leone finds the only way he can compete with cheaper imported beers is by evading sales tax. He'd like to go legitimate but calculates that it would put him of business. Meanwhile, in Brazil, an auto-parts manufacturer would like to get a bank loan to expand but finds that doing so requires an external audit. Because the company has been hiding half its workers from the social security authorities for the last five years, this presents a problem.
Yet another new blogger? This one is a bit different, and I mean that kindly. Tom Kenyon, a political scientist with FIAS, is organizing a conference on informality in January - and he'd like to get a discussion going now around the topic of enterprise formalization. While attendance at the conference is limited, all of our readers are encouraged to participate in what should be a lively discussion.
Fridays Academy postings are based on Raj Nallari and Breda Griffith's teaching notes.
Measures of Institutional Quality
While we frequently make mostly invisible tweaks to the blog, here are two new changes I'd like to share:
Casting a wide net, McKinsey estimates that the economic impact of wireless is up to 8% of a country's GDP. To unlock this value, they encourage wireless providers and/or regulators to lower the minimum (but not average) cost of owning a cell phone and push coverage into rural areas. This is from a recent whitepaper, Wireless Unbound, which they were kind enough to send me. Check here to find your way behind the firewall and read the whole thing.