Please use this form to submit your study for inclusion into our database. It will be checked by a member of the Innovation Growth Lab team, who may be in contact to ask for more information. Your email address * Your name * Title * The name of the study Short summary Examines a program in Benin that drastically reduces costs to formalize a business, while also offering tax mediation and training. Results forthcoming. A brief description of the project's goals and its current state Abstract <p>In developing countries a large majority of small and medium firms operate in the informal sector. In Benin, this is particularly the case and the national statistics agency estimated that the informal sector represented up to 70% of the GDP and 95% of employment in 2009. This evaluation takes advantage of the creation of a new legal status for small firms by the Government of Benin to study the impact of three different packages of formalization incentives on formalization rate and firm performances. 3,600 informal businesses operating in Cotonou have been randomly allocated into three treatment and one control groups.</p> The full abstract of the study, if available Links https://www.sciencedirect.com/science/article/pii/S0047272717301883 Links to any published papers and related discussions Authors * Affiliations Academic and other institutes that the authors of the study are members of Delivery partner Organisations involved in delivering the trial, if appropriate Year Year Year199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023202420252026 Month MonthJanFebMarAprMayJunJulAugSepOctNovDec Day Day12345678910111213141516171819202122232425262728293031 Journal Journal publishing the study, if available Publication stage * Working Paper Published Ongoing Research Forthcoming Discussion Paper Research theme * Entrepreneurship Innovation Business Growth Country Country or countries where this study took place. Topics What sort of topics does the study cover? Sample attributes Hypotheses / research question Do firms voluntarily move into the formal sector if the costs of formalisation are highly reduced? What is the optimal package of incentives to increase formalisation? To what extent is the fear of tax administration an important barrier to formalisation? What is the effect of becoming formal on firm performance and access to credit? Sample Trial population and sample selection 3,600 businesses operating in Cotonou, Benin. Number of treatment groups Size of treatment groups Package A: 300 businesses; Packages A+B: 900 businesses; Packages A+B+C: 900 businesses Size of control group Unit of analysis Clustered? Yes No Cluster details Trial attributes Treatment description The first treatment group will receive Package A: only information about the new status and the fact that direct and indirect costs of formalisation have been highly reduced. The second group will receive Package A+B: the same information in A, plus access to business training and bank services (access to a bank account), as further incentives to formalise. The third treatment group will receive Package A+B+C: which includes the aforementioned services, plus access to tax mediation services. Rounds of data collection Baseline data collection and method In-person interviews with firm owners. Data collection method and data collected Evaluation Outcome variables <p>Formalisation Rate. Business performance: Turnover, profits, investments. Business skills. Accounting systems. Level of trust. Access to new markets. Level of advertising. Access to banking. Number of tax payments. Employment. Standards of living.</p> Results <p>Not yet available.</p> Intervention costs Not available. Cost benefit ratio Reference Benhassine, N., McKenzie, D., Pouliquen, V., & Santini, M. (2018). Does inducing informal firms to formalize make sense? Experimental evidence from Benin. Journal of Public Economics, 157, 1-14. Citation for use in academic references
