Addressing Regulatory Software Barriers to Business Growth

This policy paper explores the relative
importance of the software regulatory barriers to growth in
Pakistan. Such software barriers have been identified as
part of the major constraint in the Framework for Economic
Growth of the Government of Pakistan. Indeed, adequate
software is needed to provide an environment in which the
hardware of growth (physical infrastructure) could be
expanded and made more productive. Among possible software
constraints, the findings of various international surveys
allow to disentangle the relative importance of multiple
possible regulatory barriers; first by identifying what is
in the books, and then by assessing what is actually
experienced on the ground by entrepreneurs. Following the
ensuing prioritization of the identified barriers, this
paper suggests that the new growth strategy would benefit
from focused policy efforts in seven key areas, where
regulatory barriers and perceived obstacles are most
constraining to business development: getting electricity,
paying taxes, enforcing contracts, registering property,
obtaining construction permits, starting a business, trading
across barriers, and having access to finance (particularly
among small firms). The paper also expounds a detailed
description of the provincial disaggregation of those
barriers, which attempt to complement the general findings
and allow for provincially-led customized solutions.