The impact of business regulatory reforms on economic growth Jamal Ibrahim Haidar ⇑ The World Bank, Washington, DC, United States Paris School of Economics, Paris, France University of Paris 1 Pantheon-Sorbonne, Paris, France article info Article history: Received 24 June 2011 Revised 12 May 2012 Available online 25 May 2012 JEL classification: O12 O17 O50 P48 Keywords: Growth Reform Development Regulations Doing Business Institutions abstract Haidar, Jamal Ibrahim—The impact of business regulatory reforms on economic growth I investigate the link between business regulatory reforms and eco- nomic growth in 172 countries. I create a 5 year dataset on busi- ness regulatory reforms from the World Bank’s Doing Business reports. Then, I test the hypothesis that business regulatory reforms increase economic growth, using data on micro-economic reforms. These data do not suffer the endogeneity issues associated with other datasets on changes in economic institutions. The results provide a robust support for the claim that business regula- tory reforms are good for economic growth. The paper establishes that, on average, each business regulatory reform is associated with a 0.15% increase in growth rate of GDP. J. Japanese Int. Econo- mies 26 (3) (2012) 285–307. The World Bank, Washington, DC, Uni- ted States; Paris School of Economics, Paris, France; University of Paris 1 Pantheon-Sorbonne, Paris, France. Ó 2012 Elsevier Inc. All rights reserved. 1. Introduction The World Bank has been publishing the annual Doing Business reports since 2004 to investigate the scope and manner of regulations that enhance business activity and those that constrain it. These reports compare countries 1 on the basis of quantitative indicators of business regulations. A fundamen- tal premise of business regulations is that economic activity requires good rules – rules that establish and 0889-1583/$ - see front matter Ó 2012 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.jjie.2012.05.004 ⇑ Address: Paris School of Economics, Paris, France. E-mail addresses: JHaidar@worldbank.org, Jamal.Haidar@ParisSchoolofEconomics.Eu, Jamal.Haidar@malix.univ-paris1.fr 1 The Doing Business 2011 dataset covers 183 countries. J. Japanese Int. Economies 26 (2012) 285–307 Contents lists available at SciVerse ScienceDirect Journal of The Japanese and International Economies journal homepage: www.elsevier.com/locate/jjie