Reducing bureaucracy and corruption affecting small and medium enterprises

Filed under - Private sector

Published on 8 April 2013 as a U4 Helpdesk answer
What are the main tools/levers to help reduce the impact of bureaucratic corruption on small and medium size enterprises? Does removing bureaucratic discretion help (e.g.publishing fixed rates for taxes and duties, simplifying business registration procedures, conducting routine transactions electronically rather than in person)? Please cite country examples where possible.

Content

1. The links between corruption and bureaucracy
2. Main trends in reducing bureaucracy
3. Country studies: Portugal and Georgia
4. References

Note

This answer draws on a previous Transparency International Helpdesk answer produced in 2012 on the linkages between bureaucracy and corruption.

Summary

Excessive bureaucracy imposes a disproportionate bureaucratic burden on small and medium size enterprises, creating both incentives and opportunities for bribery and corruption. This can manifest itself in the form of excessive or overly rigid administrative procedures, requirements for unnecessary licences, protracted decision-making processes involving multiple people or committees and a myriad of specific rules that slow down business operations. Countries across the world have made use of a variety of tools to reduce bureaucracy and limit corruption opportunities affecting small and medium size enterprises. This includes one-stop shops, the use of data-sharing and standardisation, common commencement dates for new rules, as well as simplification of administrative procedures, and tailored guidance to SMEs. ICTs and E-government have also been used to improve administrative regulations and  most importantly improve transparency and accountability. While in some countries such reforms are part of broader anti-corruption strategies, in others bureaucratic reform primarily aims at promoting growth, attract investments, and increase competitiveness. This answer analyses the case of Portugal which implemented extensive and ambitious reforms aimed at reducing bureaucracy, and the case of Georgia, which is often referred to as a best practice example in reducing red tape and curbing bureaucratic corruption.

Author(s): Maira Martini, Transparency International, mmartini@transparency.org
Reviewed by: Marie Chêne, Transparency International, mchene@transparency.org Robin Hodess, Ph.D, Transparency International, rhodess@transparency.org
Publication date: 8 April 2013
Number: 380

Download full answer

Region - Global   
Language(s) - English   
Topic - Private sector   |   Tools   

Contact the Anti-Corruption Helpdesk

If you work for one of our supporting partner organisations, submit your query to the Helpdesk:
tihelpdesk@transparency.org

More Helpdesk answers

21
Dec
2012

Literature review on the link between corruption, poverty and conflict, and evidence of the impact of corruption on donor interventions

Can you please provide a literature review of the evidence that corruption is linked with poverty; that corruption is linked with conflict; and of ...See the answer

24
Jul
2014

Donor accountability mechanisms to curb corruption in aid

We would like to have an overview of donor accountability mechanisms, including donor requirements for recipient countries. Please also provide us ...See the answer