Title of paper

Political and Governance Dimensions of Business Informality in Tanzania

Presenter's country

Tanzania

Start Date

28-5-2016 12:00 PM

End Date

28-5-2016 1:05 PM

Location

Hall I

Submission type

Presentation

Abstract

The biggest challenge Tanzania is facing with the private sector is that many of business enterprises operate informally. This paper, based on key findings by the main researchers working on the topic, holds that political discouragement and bad governance poses a formidable challenge to compliance with regulations. Business regulation is disproportionate; it lacks good coordination, transparency, effective engagement and adequate funding; and it is captured by industry and politics. These bad governance practices leave the enterprises confused and unable to comply, raise the costs of doing business, lower the probability of punishment for non-compliance, increase the feelings of injustice and make the regulatory framework illegitimate, ultimately chasing business enterprises into the shadows. Unless deliberate actions to improve the governance of the authorities are taken, business formality will remain to be a far distant dream. This is a sad state as high informality is detrimental to the welfare of the state, environment, consumers, employees and business enterprises themselves.

Keywords

business regulation, governance, business informality

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May 28th, 12:00 PM May 28th, 1:05 PM

Political and Governance Dimensions of Business Informality in Tanzania

Hall I

The biggest challenge Tanzania is facing with the private sector is that many of business enterprises operate informally. This paper, based on key findings by the main researchers working on the topic, holds that political discouragement and bad governance poses a formidable challenge to compliance with regulations. Business regulation is disproportionate; it lacks good coordination, transparency, effective engagement and adequate funding; and it is captured by industry and politics. These bad governance practices leave the enterprises confused and unable to comply, raise the costs of doing business, lower the probability of punishment for non-compliance, increase the feelings of injustice and make the regulatory framework illegitimate, ultimately chasing business enterprises into the shadows. Unless deliberate actions to improve the governance of the authorities are taken, business formality will remain to be a far distant dream. This is a sad state as high informality is detrimental to the welfare of the state, environment, consumers, employees and business enterprises themselves.