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Administrative Barriers Essay

1012 Words5 Pages

Administrative barriers play important role for companies both foreign and local because bureaucracy may take too much time and costs to accomplish all necessary procedures to establish and operate business. As a result potential investors may decide to cancel investment projects or relocate to other countries. The objective of this paper was to study the importance of administrative barriers in a set of 32 developing countries, including 20 African and 7 Eastern and Central Europe countries with by alphabetical order (the year of the data collection is in parenthesis): Argentina (1999), Armenia (2000), Bulgaria (2000), Burkina Faso (2000), Chile (1999), Czech Republic (1999), Egypt (1999), Ghana (1995), India (1999), Jordan (1998), Kenya (1999), …show more content…

The main delays arose from land (purchase from the state) and site development procedures, especially permits and inspections from local authorities. In spite of trade liberalization efforts of that time, import-export permits and clearance processes were still extremely time-consuming in Africa, averaging almost 47 business days (with a maximum delay of 63 days in Morocco) and exceeded substantially the time spent in other regions. In general, entry approvals appeared less time-consuming than other procedures in majority of sample countries. However, residence and working permits could cause delays of more than 2 months in Bulgaria and …show more content…

The estimated coefficient showed that the better the country is ranked in the Transparency database, the lower are the administrative costs faced by investors. The authors of the paper found that costs associated with administrative barriers were lower in a free political regime. It was worth to say that the trade openness index (measured as ratio of trade over GDP) was not significantly correlated with the cross-country variations in administrative costs. It was also found that average salaries influenced administrative costs, thus supporting the argument that low paid bureaucrats were less hard-working in dealing with investors’

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