Doing Business 2013, Getting Better, Oct 27th 2012, The Economist
Bad rules breed corruption. Cutting them costs nothing
SINCE 2003 the International Finance Corporation (IFC) and the World Bank have been tracking the business-friendliness of government rules around the world. Things are looking up. Nearly all regions are catching up with the best practices seen in the richest countries.
This matters for many reasons. One is that onerous rules breed corruption. For as many countries as it can, the IFC plots its own measures of the regulatory burden against perceived levels of corruption, as ranked by Transparency International, a pressure group. As the chart shows, the more rules impede business, the more incentive businessfolk have to bribe them away. Lighter rules mean less baksheesh. They also mean a larger formal economy and a wider tax base.