in OECD economies with less regulated product markets, which has direct implications for the welfare of a country’s workforce. Cacciatore and Fiori (2016) find that product market deregulation reduces the welfare costs associated with business cycle fluctuations in EU countries. Islam et al. (2022) flag the lack of dynamism induced by PMR as one explanation behind the stagnation of labor markets observed in MENA countries.

Much of the empirical work cited above relies on the PMR indicators carefully compiled by the OECD. These measures do usually not exist for LMICs for at least two reasons. On the one hand, collecting data from (formal) firms in LMICs is more cumbersome due to a lack of accessible infrastructure. On the other hand, OECD PMR indicators only measure _de jure_ conditions and do not provide information about the _de facto_ states under which firms operate. In LMICs, where law enforcement is often much weaker than in advanced country settings, such indicators are less useful. In the upcoming sections, we discuss different regulation types in more detail. We include several papers that review the implementation of specific regulations in the context of LMICs.

# **3.2.2 Lowering Entry Barriers and Delicensing**

The ease with which new firms can enter a market is a decisive factor for the level of product market competition in an economy. In a recent report, Vitale et al. (2020) point out that the firm registration process is still overly complex in many (OECD and non-OECD) countries, which continue to use licenses and permits and do not have a “silence is consent” rule to speed up the administrative process. In addition, the authors promote introducing one-stop shops that can provide businesses with information on all licenses and permits, and that can issue all of them. Interestingly, LMICs seem to face this problem to a lesser extent than rich countries, given that they often either have no formal processes—or relatively uncomplicated ones—for standard entrants. In Indonesia, for example, Lewis et al. (2022) praise the general low complexity of regulatory procedures, as well as the simple language in the communication of new regulations. In 2018, the Indonesian government further simplified obtaining licenses and permits for businesses. In addition, there is now an online one-stop shop that allows completing most licensing requirements online. In Kazakhstan, the OECD (2018a) notes that new domestic firms can enter the Kazakh market relatively simply by obtaining all licenses and permits in a single visit to an official center. In contrast, foreign firms still have relatively cumbersome entry procedures characterized by low automation and poor information availability.

Regarding theoretical models, firm entry barriers are the most common way of including anti-competitive regulations in the model framework. They mostly come in the form of fixed costs that firms need to pay to start operations (see, for example, Blanchard and Giavazzi, 2003). In most models, as discussed in Section 3.2.1, lowering entry barriers proves beneficial for workers due to increases in employment or real wages in the longer run. While the mechanisms at play are usually more explicit when analyzed through the lens of a model, this section will discuss empirical findings based on the evaluation of actual reforms to entry barriers. This allows for a more realistic picture of past experiences, as well as a better sense of the magnitude of the results.

In OECD countries, Piton and Rycx (2019) identify reductions in barriers to entrepreneurship as the 18