Consequences of Business Regulation- South America at the outset of the 21st century

Sammanfattning: This is a study of Latin America’s economic development and how business regulation contributes to or hinders that process. We specifically focus on three nations: Chile, Brazil, and Bolivia, to illustrate the main differences across the region. We have studied the effects of business regulation on corruption, the size of the informal sector and how these in turn influence economic development as a whole. We have found that cumbersome regulation is likely to cultivate corruption and give rise to a large informal sector, thus hampering formal economic growth. Conclusively we claim that reducing regulation, alternatively improving the level of governance and rule of law, is beneficial for the development of the formal private sector. Additionally such progress in the political and economic environment is conducive to improving overall welfare.