Formalization and its limits
Benin
Do more registrations mean better businesses?
Entreprenant
What the evidence shows
The full package raised formalization by 16.3 percentage points. Table 5 of the 2018 article found no statistically significant effects of formalization on sales, profits or employee numbers. [1][2]
The Entreprenant regime combined simplified registration with assistance packages: in-person support, training, banking assistance and tax mediation. Groups received different combinations. [1][2]
Offer assistance
Observe more formalization
Check whether income and jobs change
Costs and delivery
Free registration does not make assistance free. The study considers the intervention costly per firm formalized; this profile does not assign an unproven financial return. [1][2]
Limits of the comparison
Statistical power to measure the effects of formalization is limited. A non-significant result does not prove an exactly zero effect, but registrations alone cannot justify claims of job creation.
OpenGov3's interpretation
What it can teach Brazil
Does the target track thriving businesses or merely new registrations?
What to monitor when adapting it
- Formalisation by type of assistance
- Sales, profits and employment, separate from registration counts
- Assistance cost per additional formalisation
- Precision of estimates and differences between groups
These are criteria for analysis, not commitments already made or estimated outcomes for Brazil. A well-documented practice is not, by itself, causal proof of an entire country's success.
Sources consulted
Consulted on 10/29/2026. Each result retains its observed period; institutional descriptions and impact evaluations have different scopes.
- Benhassine et al. — Does inducing informal firms to formalize make sense? (2018) (opens in a new tab)
2018 article: an experiment on formalisation, performance and costs in Benin.
- World Bank — Benin: Impact Evaluation of the Entreprenant Status (opens in a new tab)
Institutional summary of the Entreprenant experiment; links to the research and data.