Finding a Path to Formalization in Benin

In April 2014, the Government of Benin launched the entreprenant status, a simplified and free legal regime offered to small informal businesses to enter the formal economy. This paper presents the short-term results of a randomized impact evaluation testing three different versions of the entreprenant status on business registration decisions, each version including incremental incentives to registration: (i) information on the new legal status and its benefits, (ii) business training, counseling services, and support to open a bank account, (iii) tax mediation services. The study included 3,600 informal businesses operating with a fixed location in Cotonou, Benin, which were randomly allocated between three treatment groups and one control group. One year after the program launch, all versions of the program had significant impact on formalization rates. The impact was 9.1 percentage points in the first treatment group; 13 percentage points in the second group; and 15.8 percentage points in the last group. The program had a higher impact on male business owners, with more education, operating outside Dantokpa Market, in sectors other than trade, and that before being offered the incentives to formalization had characteristics similar to businesses that were already formal. Data from a second follow-up survey, which is expected to take place in March 2016, will explore the impacts on other outcomes, like business performances or access to banking.

Bibliographic Details

Main Authors:	Benhassine, Najy, McKenzie, David, Pouliquen, Victor, Santini, Massimiliano
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2015-12
Subjects:	BUSINESS FACILITATION, DEPOSIT, LIABILITY, QUALITY OF SERVICES, CHECKS, ACCOUNTING, ENTERPRISE DEVELOPMENT, TAX EXEMPTION, LEGAL ENVIRONMENT, CERTIFICATE, SALES, DUMMY VARIABLES, MEDIUM ENTERPRISES, OPTION, EXCHANGE, BANKING SYSTEM, INFORMATION, BANK ACCOUNT, DEVELOPING COUNTRIES, SELLING, MONITORING, ACCESS TO BANK, FINANCIAL STATEMENTS, IMPACTS, LOAN, TRADE SECTOR, TAX, OWNERSHIP, QUALITY, DUMMY VARIABLE, BENEFICIARIES, INTERNATIONAL BANK, OPEN ACCESS, ENABLING ENVIRONMENT, INFORMATION SERVICES, BUDGET, ECONOMIC ACTIVITY, SMALL BUSINESS, INSTITUTIONS, INTERNATIONAL FINANCE, INFORMATION BANKS, ADVERTISING, TECHNICAL ASSISTANCE, BUSINESS REGULATION, COMMERCE, PHONE NUMBER, ONE-STOP SHOP, COMMERCIAL BANK, CONTRACTS, IMPACT EVALUATION, TAX REGIME, LICENSE, TRADING, TAX EXEMPTIONS, PRODUCTIVITY, BUSINESS SERVICES, MARKETS, DIRECT COSTS, INTERNATIONAL DEVELOPMENT, FINANCIAL PRODUCTS, LOANS, BUSINESS ENTRY, ARTISANS, BUSINESS REGISTRATION, DATABASES, CASH TRANSFERS, ACCOUNT, BANK FINANCING, FINANCE, TAXES, TAX FORMS, PHONE, HUMAN CAPITAL, GOOD, TAX RATE, INSPECTION, BUSINESS MANAGEMENT, CONTACT INFORMATION, BUSINESS PLAN, TRANSPARENCY, RESULTS, ACCESS TO BANKS, BUSINESS PERFORMANCES, TURNOVER, FUTURE, MOBILE PHONE, COMPETITIVENESS, ELECTRICITY, RETURNS, TAX REGIMES, CONTRACT, PROTOCOLS, FIRM PERFORMANCE, TAX RATES, COST, SHARES, MARKET, NEW MARKETS, COMMERCIAL LAW, BANK ACCOUNTS, LEVY, ADMINISTRATION, RESULT, BOOKKEEPING, BANK LOAN, REGISTRATION SYSTEM, BANK LOANS, BUSINESS ACTIVITY, NETWORK, BUSINESSES, BUSINESS, COMMERCIAL BANKS, SHARE, TAX SYSTEM, COLLATERAL, PERFORMANCE, INSPECTIONS, BUSINESS PLANS, INSTITUTION, PROFIT, PROTOCOL, ADMINISTRATIVE PROCESS, ACCOUNTS, CHECK, DEBIT CARD, COMMUNICATION, CHAMBER OF COMMERCE, UNFAIR COMPETITION, CUSTOMERS, DATABASE, PROFITS, IMPLEMENTING AGENCIES, LIMITED LIABILITY, BUSINESS PERFORMANCE, IMPLEMENTATION, SMALL BUSINESSES, PERFORMANCES, REGISTRATION PROCESS, BUSINESS TRAINING, TAX OBLIGATIONS, MICROENTERPRISES,
Online Access:	http://documents.worldbank.org/curated/en/2015/12/25660436/finding-path-formalization-benin-early-results-after-introduction-entreprenant-legal-status https://hdl.handle.net/10986/23472
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