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July 11, 2010
Deals vs Rule: Good obs on how it works in emerging mkts
This speaks to me.
Deals vs. rules - PSD Blog - The World Bank Group
Over on the All About Finance blog, Mary Hallward-Driemeier has an excellent post on the "deals" that firms have to make in countries with excessive regulations. Money quote:
For countries with lengthy requirements...almost no firm actually faces the formal burdens on the books.
This does not mean that lengthy formal practices are costless. Rather, firms ‘pay’ through other channels. This variation in implementation is associated with greater activities on the part of firms to influence the actions of officials (e.g. paying bribes or spending time with officials). Rather than coping with the application of (more or less favorable) rules, firms face deals. And the larger the gap between the de jure and de facto outcomes, the greater the potential space for deals, and indeed, the more prevalent are bribes.
Spot on comment actually.
Posted by The Lounsbury at July 11, 2010 07:29 PM
Filed Under: Biz - Policy & Development
, Biz - Private in MENA
, Business
, MENA Region General
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