Business environment constraints in the third decade of transition: calibrating the shadow costs of obstacles to business

By Wendy Carlin and Mark Schaffer

In this paper we look at how much of a burden the business environment can place on firms. For the first time,  the BEEPS V round of business environment surveys conducted in 2012-14 included a question asking managers to predict their cost reductions if a range of obstacles to their operation were removed. We use these responses to calibrate the answers to questions asking for a qualitative assessment of obstacles on a scale from minor to very severe. These calibrations will help to give policy-makers some sense of the magnitude of cost reductions across many aspects of the business environment.