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Impact Evaluation of Business License Simplification in Peru

Impact Evaluation of Business License Simplification in Peru

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This evaluation is about the nature and magnitude of the cost savings and other benefits of business license simplification in one of the central districts of Lima, Peru. IEG asked whether the project’s license simplification reform reduced costs and operating procedures and whether it increased business registration. The project was implemented from 2005 to 2007. Two evaluations done in 2007 and 2008–11 examined, respectively, whether the project led to reductions in time and procedures and whether it led to improved business outcomes. This evaluation reviewed both of those, collected additional data, and drew lessons for future operations. The evidence points to significant reductions in time, monetary costs, and business procedures for businesses that registered to obtain licenses. However, the greater formality of the business environment did not improve the enterprises’ access to financing, facilitate investment, or remove invisible barriers to business growth. These results have policy implications for formal business environments. Although there were not large positive effects for enterprise outcomes, enterprise owners and society overall gained through owners spending less time away from their firms to certify and register their firms. Such projects are sometimes promoted as a way to foster dynamic businesses, but the evidence in this report suggests that the more mundane time and cost savings are a significant part of the benefits. These results offer the promise of sharpening the understanding of the circumstances under which reforms may be viewed as a growth engine for a society; they also enable IFC to provide a more focused understanding of reasonable expectations for such projects. Based on these findings, IEG’s evaluation offers several recommendations about follow-up evaluations, investment in data collection, and developing a base of evidence to aid in setting expectations for projects.

This evaluation is about the nature and magnitude of the cost savings and other benefits of business license simplification in one of the central districts of Lima, Peru. IEG asked whether the project’s license simplification reform reduced costs and operating procedures and whether it increased business registration. The project was implemented from 2005 to 2007. Two evaluations done in 2007 and 2008–11 examined, respectively, whether the project led to reductions in time and procedures and whether it led to improved business outcomes. This evaluation reviewed both of those, collected additional data, and drew lessons for future operations. The evidence points to significant reductions in time, monetary costs, and business procedures for businesses that registered to obtain licenses. However, the greater formality of the business environment did not improve the enterprises’ access to financing, facilitate investment, or remove invisible barriers to business growth. These results have policy implications for formal business environments. Although there were not large positive effects for enterprise outcomes, enterprise owners and society overall gained through owners spending less time away from their firms to certify and register their firms. Such projects are sometimes promoted as a way to foster dynamic businesses, but the evidence in this report suggests that the more mundane time and cost savings are a significant part of the benefits. These results offer the promise of sharpening the understanding of the circumstances under which reforms may be viewed as a growth engine for a society; they also enable IFC to provide a more focused understanding of reasonable expectations for such projects. Based on these findings, IEG’s evaluation offers several recommendations about follow-up evaluations, investment in data collection, and developing a base of evidence to aid in setting expectations for projects.

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Publish date: Dec 19, 2012
Added to Scribd: Jan 07, 2013
Copyright:AttributionISBN:9780821398012

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06/05/2015

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9780821398012

 
Impact Evaluation o BusinessLicense Simplifcation in Peru
October 2012
An Independent Assessment of an InternationalFinance Corporation-Supported Project
 
Th W B Gup
WorkinG for a World free of PoverTy
 The World Bank Group consists o ve institutions – the International Bank orReconstruction and Development (IBRD), the International Finance Corporation(IFC), the International Development Association (IDA), the MultilateralInvestment Guarantee Agency (MIGA), and the International Centre or theSettlement o Investment Disputes (ICSID). Its mission is to ght poverty orlasting results and to help people help themselves and their environmentby providing resources, sharing knowledge, building capacity, and orgingpartnerships in the public and private sectors.
Th ipt eut Gup
iMProvinG THe World Bank GroUP’S develoPMenT reSUlTSTHroUGH eXCellenCe in evalUaTion
 The Independent Evaluation Group (IEG) is an independent unit within theWorld Bank Group. It reports directly to the Board o Executive Directors, whichoversees IEG’s work through its Committee on Development Efectiveness. IEGis charged with evaluating the activities o the World Bank (the InternationalBank or Reconstruction and Development and the International DevelopmentAssociation), the work o the International Finance Corporation in private sectordevelopment, and the guarantee projects and services o the MultilateralInvestment Guarantee Agency. The goals o evaluation are to learn rom experience, to provide an objectivebasis or assessing the results o the Bank Group’s work, and to provideaccountability in the achievement o its objectives. It also improves Bank Groupwork by identiying and disseminating the lessons learned rom experience andby raming recommendations drawn rom evaluation ndings.
 
Ipac Ealai  Bsiess LiceseSiplifcai i Pe

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