Effective and efficient regulation by government is important for economic development. Effective and efficient regulation promotes economic development, while vexatious regulation can cripple it. Many of the problems of developing countries are blamed on ineffective and inefficient government regulation. At the same time, however, understanding of the appropriate institutions and processes of the regulatory state in the context of developing countries remains underdeveloped. Studies to date tend to be of a case study nature and generalising the findings is restricted by the lack of a coherent theoretical framework. This paper attempts to develop a methodology for researching regulation in developing countries, drawing from the economics of regulation literature. The proposed methodology is deductive with empirical work used to refine and advance theory so as to develop over time a rigorous approach to researching regulation in developing economies. While there is a recognised need to ground research in the particular needs of each developing country, the paper demonstrates that the economics of regulation literature provides a useful departure point to develop such an analysis.
Manchester, UK, CRC Working Paper, No. 34, 29 pp.