The Center for Latin America of the Atlas Network presented this week its Index of Bureaucracy in Latin America (IB Lat) that evaluates the difficulty in terms of the time it takes for small local businesses to deal with the bureaucratic requirements inherent to their operation across Latin America.
Five liberal organizations in the region are participating in the creation of the index: Fundación Libertad (Argentina); Instituto Liberal (Brazil); Instituto de Ciencias Políticas Hernán Echavarría Olózaga (Colombia); México Evalúa (Mexico) and Cedice-Libertad (Venezuela).
The project, inspired by the work of the Slovak Institute for Economic and Social Studies, evaluates the bureaucratic conditions of five Latin American economies, including Spain through the Civismo Foundation, given the European country’s close historical and cultural ties with the region.
The current state of the bureaucracy
In its first installment, the study reveals that companies in Latin America (in the universe of countries included) must spend between 100 and 1,000 hours a year dealing with the complex bureaucratic structures that regulate the commercial and administrative procedures they need to operate.
According to this year’s index, Brazil is the country with the least onerous bureaucracy in the region, despite being one of the largest economies. Businessmen in Brazil spend an average of 114.5 hours/year on administrative procedures.
The study estimates that Brazil’s result is the product of an effort by the government to favor small businesses, which require less documentation, simplifying requirements and administrative procedures. However, the data would be different if medium and large companies were taken into account.
The results for Spain, which is next in the index with the least bureaucratic complexity, are almost three times the average values for Brazil, with 332 hours/year spent on bureaucratic procedures. However, the study highlights the representative economic activity of the Spanish tertiary sector, with 255 hours/year, a result that is close to the European average.
In Mexico it takes 491.9 hours/year to deal with bureaucracy, in Argentina 808.5 and in Venezuela, which has the most complex bureaucratic system of the countries studied, it takes 1043.3 hours/year.
The researchers from the participating organizations studied the productive structure of their countries to determine the most important activities in their economic sectors and the role that small businesses play in them.