On the Short- and Medium-Term Effects of Formalisation: Panel Evidence from Vietnam

This paper analyses the consequences of formalisation on the performance of informal firms, using a panel dataset from Vietnam. We find that switching firms (before switching) have higher profit and value added compared to non-switching firms; suggesting heterogeneity. Becoming formal leads to an additional increase in switching firms’ profit and value added. The benefits of formalisation materialise in the short-term (one year) and persist in the longer-term (three or more years). These benefits run through various channels such as better access to powered equipment or higher business association membership; but not better access to credit.     

Legislating Change? Responses to Criminalizing Female Genital Cutting in Senegal

Although the international community has recently promoted legislation as an important reform strategy for ending female genital cutting (FGC), there exist divergent views on its potential effects. Supporters argue that legal prohibition of FGC has a general deterrent effect, while others argue legislation can be perceived as coercive, and derail local efforts to end the practice. This study examines the range of responses observed in rural Senegal, where a 1999 anti‐FGC law was imposed on communities in which the practice was being actively contested and targeted for elimination. Drawing on data from a mixed‐methods study, we analyze responses in relation to two leading theories on social regulation, the law and economics and law and society paradigms, which make divergent predictions on the interplay between social norms and legal norms. Among supporters of FGC, legal norms ran counter to social norms, and did little to deter the practice, and in some instances incited reactance or drove the practice underground. Conversely, where FGC was being contested, legislation served to strengthen the stance of those contemplating or favoring abandonment. We conclude that legislation can complement other reform strategies by creating an “enabling environment” that supports those who have or wish to abandon FGC.     

Is corruption distasteful or just another cost of doing business?

Public Choice - Using data from a lab experiment carried out in Kenya, we show that while “legitimate” costs and costs imposed by corruption both deter investment, the latter is no more...