Barriers to Entrepreneurship - World Bank

Motivation• Little is known about the business environments that promotenew firm creation. This is an important concern forpolicymakers, who are trying to implement policies that willfoster entry.• What is the role of entry regulations, especially bureaucraticregulations on setting up limited liability companies, inexplaining variations in patterns of firm entry?• The early debate on entry regulations emphasized the possibilitythat crooks might register with little capital and dupeunsuspecting investors or consumers. According to this view,entry regulations serve the public interest by preventing fraud.• Others describe regulations as devices to protect private interestsof industry incumbents or the regulators.2