An International Monetary Fund study links digital governance reforms to higher productivity in small firms
High informality persists as firms avoid complex regulations and high compliance costs
Small firms hesitate to scale, leading to a “missing middle” and inefficient resource allocation
Digitisation reduces friction, lowers costs, and limits discretion in public administration
Better processes improve capital allocation and narrow productivity gaps across firms
Ease-of-doing-business reforms have improved business-state interactions over time
Focus must shift to lagging regions where basic reforms can deliver the biggest gains