Administrative culture and formalization of informal EPs in Cameroon

The quest for government efforts to improve tax revenues leads us to study the effect of knowledge of justice and tax administrations primarily on the likelihood of formalizing activity in Cameroon. To do so, we use survey data on the migration of 1,745 small businesses to formalization conducted by the International Labor Office in 2017. We specify a 2-equation probit model that we estimate simultaneously in order to reduce the risk of endogeneity between knowledge of the administrations in charge of formalization and the firm's motivation to register. We find that knowledge and registration has a positive impact on the formalization of small informal businesses in Cameroon. This is the case of the Fa'cil program conducted in Brazil, which realizes that extending one-stop shops for formalization in municipalities has a positive impact on business registration.