6. Decentralization, Regulatory Reform, and the Business Climate

AbstractWe argue that the World Bank has successfully marshaled the Ease of Doing Business (EDB) Index to amass considerable influence over business regulations worldwide. The Ease of Doing is a global performance indicator (GPI), and GPIs—especially those that rate and rank states against one another—are intended to package information to influence the views of an audience important to the target, such as foreign investors or voters, thus generating pressures that induce a change in the target's behavior. The World Bank has succeeded in shaping the global regulatory environment even though the bank has no explicit mandate over regulatory policy and despite questions about EDB accuracy and required policy tradeoffs. We show that the EDB has a dominating market share among business climate indicators. We then use media analyses and observational data to show that EDB has motivated state regulatory shifts. States respond to being publicly ranked and some restructure bureaucracies accordingly. Next we explore plausible influence channels for the EDB ranking and use an experiment involving US portfolio managers to build on existing economics research and examine whether the rankings influence investor sentiment within the experiment. Using a case study of India's multiyear interagency effort to rise in the EDB rankings, as well as its decision to create subnational EDB rankings, we bring the strands of the argument together by showing how politicians see the ranking as affecting domestic politics, altering investor sentiment, and engaging bureaucratic reputation. Overall, a wide variety of evidence converges to illustrate the pressures through which the World Bank has used state rankings to achieve its vision of regulatory reform.

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Opportunities for accelerating labor productivity growth: The role of small and medium enterprises

Voprosy Ekonomiki ◽

10.32609/0042-8736-2020-3-98-114 ◽

2020 ◽

pp. 98-114

Author(s):

Evguenia V. Bessonova ◽

Alexander G. Morozov ◽

Natalia A. Turdyeva ◽

Anna N. Tsvetkova

Keyword(s):

Labor Productivity ◽

Productivity Growth ◽

Small And Medium Enterprises ◽

Growth Potential ◽

Business Climate ◽

Labor Productivity Growth ◽

Positive Effects ◽

Low Efficiency ◽

Medium Enterprises ◽

Medium Firms

The paper considers necessary conditions for acceleration of labor productivity growth in Russia. Based on micro data, as well as aggregate data, the paper quantifies the contribution of small and medium firms to labor productivity growth. It shows that mere increase of the number of small and medium enterprises is not as important for positive effects of these programs, as qualitative improvements: development of favorable environment for growth, which is largely determined by business climate. Accelerating productivity growth involves redistribution of labor and capital from inefficient to efficient enterprises. In particular, it is necessary to create conditions, which allow a firm to grow after it enters the market instead of stagnating as a small firm with low efficiency. At the same time, it is necessary for ineffective firms, which exhausted their growth potential, to have an opportunity to exit the market easily leaving resources including labor to fast-growing companies.

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Basel III: In quest for criteria and scenarios of the banking regulation reform advancement

Voprosy Ekonomiki ◽

10.32609/0042-8736-2016-2-77-93 ◽

2016 ◽

pp. 77-93 ◽

Cited By ~ 1

Author(s):

E. Dzhagityan

Keyword(s):

Financial Regulation ◽

Cost Optimization ◽

Spillover Effect ◽

Regulatory Reform ◽

Banking Regulation ◽

Capital Adequacy ◽

Basel Iii ◽

Eurasian Economic Union ◽

Downward Pressure ◽

Crisis Recovery

The article looks into the spillover effect of the sweeping overhaul of financial regulation, also known as Basel III, for credit institutions. We found that new standards of capital adequacy will inevitably put downward pressure on ROE that in turn will further diminish post-crisis recovery of the banking industry. Under these circumstances, resilience of systemically important banks could be maintained through cost optimization, repricing, and return to homogeneity of their operating models, while application of macroprudential regulation by embedding it into new regulatory paradigm would minimize the effect of risk multiplication at micro level. Based on the research we develop recommendations for financial regulatory reform in Russia and for shaping integrated banking regulation in the Eurasian Economic Union (EAEU).

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