How is registering a business like getting married?

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Editor's Note: Yara Salem is a Private Sector Development Specialist with the Doing Business project and manages the Starting a Business indicator.

We know from Doing Business data that burdensome licensing procedures are a significant obstacle for firm registration. But it looks like firm registration is not the only thing that suffers from these kinds of bureaucratic hurdles. A study I ran across recently (Changing the Price of Marriage: Evidence from Blood Test Requirements) suggests that even matters much closer to the heart are affected in a similar way.

The study examined the impact of changes in the 'price' of marriage on the marriage decision - price being understood as the cost associated with hurdles like passing a blood test requirement (BTR). (BTRs were originally required to screen for communicable diseases, but have been rendered obsolete by advances in medicine.) According to the study:

Using a within-group estimator that holds constant state and year effects and exploits variation in the repeal dates of BTRs across states, we find that BTRs are associated with a 5.7% decrease in marriage licenses issued by a state. Using individual-level marriage license data from 1981-1995, we find that about half of this effect is due to couples seeking marriage licenses in other states, with the other half due to deterred marriages.

In the Doing Business project, we find that government regulations can have a big impact on an entrepreneur's decision to start a business. In economies where regulations are excessively complicated, the entrepreneur either registers somewhere else where regulations are simpler and easy to understand and comply with, or simply works informally with no registration at all.


Authors

Yara Salem

Senior Infrastructure Specialist

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OLGA-LEDNICHENKO -KATRINA-KAIF
its like before i say "I DO" - there is something to do -> the due-deligence: to avoid adverse selection.. Of course there is a course of adverse selection: at the very minimum its "moral hazard". adverse selection and moral hazard cause financial instability and in marriage it's called - therapy and god forbid no - a costly trip to the law office Thanks for the article, it's quite an interesting read. Cheers Olga-Lednichenko

its like before i say "I DO" - there is something to do -> the due-deligence: to avoid adverse selection.. Of course there is a course of adverse selection: at the very minimum its "moral hazard". adverse selection and moral hazard cause financial instability and in marriage it's called - therapy and god forbid no - a costly trip to the law office Thanks for the article, it's quite an interesting...

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Jean suhas
"Invitation: Online debate on India-Brazil-South Africa (IBSA) Policy Dialogue Forum In partnership with the Ideas for Development blog, the International Policy Centre for Inclusive Growth (IPC-IG) is launching an online debate that will contribute with inputs for the forthcoming IBSA Academic Forum, which will be hosted by IPC-IG on 12-13 April in Brasilia, Brazil. We invite you to participate in this discussion and reflect about the following issues: - What is the role of the emerging countries in shaping world politics? - How can India, Brazil and South Africa strengthen cooperation in key issues on the global agenda? - In which ways an improved policy dialogue among developing countries can contribute to the implementation of effective policies towards the achievement of inclusive growth and human development? Join us at: http://www.ideas4development.org We also invite you to visit the IBSA Academic Forum website, where you can find interesting papers, resources and breaking news. Visit:

"Invitation: Online debate on India-Brazil-South Africa (IBSA) Policy Dialogue Forum In partnership with the Ideas for Development blog, the International Policy Centre for Inclusive Growth (IPC-IG) is launching an online debate that will contribute with inputs for the forthcoming IBSA Academic Forum, which will be hosted by IPC-IG on 12-13 April in Brasilia, Brazil. We invite you to participate...

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