Enhancing the Benefits of Formalization: Experimental Evidence from the Introduction of the Entreprenant Status in Benin

Abstract

Using a randomized experiment, the authors show that enhancing the benefits of formalization through personalized assistance induces more firms to formalize. However, formalization appears to offer limited benefits to the firms, and the costs of assistance are high, suggesting that such enhanced formalization efforts are unlikely to be cost effective. This research was funded under the Private Enterprise Development in Low-Income Countries (PEDL) Programme