Business Regulation and Poverty

Using panel data for 189 economies from 2004 to 2016, we show that business-friendly regulations are correlated with the poverty headcount at the country level. This association is significant using the overall World Bank’s Doing Business index, as well as specific indicators on the difficulty of starting a business, acquiring licenses, getting credit and contract enforcement. Other significant correlates of the poverty headcount include government expenditure, adult female mortality, a country’s income per capita, and the regional dummies for East Asia and Eastern Europe.

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