What are administrative barriers?

Administrative barriers are one of the many problems affecting the successful and efficient development of the economy in our country and the associated craft. This article will examine in detail what kind of problem this is, as well as its varieties and possible solutions.

Definition

Administrative barriers are some obstacles faced by entrepreneurs and subjects of market relations and which they face before them by the legislative authorities of the state where this activity is carried out in the form of a set of certain rules. All market players are required to comply with these rules, while necessarily paying the state certain amounts (which, incidentally, are not going to the country's budget) for a number of different regulatory procedures and services in the field of the bureaucratic apparatus.

The problem of administrative barriers is one of the very significant and big problems of the modern economy in the Russian Federation. Their concentration is especially high in the field of economy.

Groups

The barriers considered in this article can be divided into three groups:

• The former arise if the subject subject to it intends to gain access to any economic resources and official legal rights to use these resources in their activities (for example, an entity’s attempt to register a new company or its status reform, to rent a room, get any material values ​​on credit or leasing, etc.).

• The second ones arise if the subject subjected to it intends to legally obtain the rights to conduct activities related to economic activities (for example, an attempt is made by the subject to legally obtain a license for his labor, to certify or register any goods in his / her turnover etc.)
• Still others arise if the subject subjected to it simply conducts its activities in the field of economy (for example, receiving any benefits for carrying out this activity, sanctions imposed in case of ignoring the rules established by the state, etc.)

Kinds

In any way, it is not possible to structure and classify in detail all possible types of administrative barriers, since there are so many of them, and they can all be varied in accordance with the specific situation in which the business entity is located. In the future, the article will indicate some characteristic features for conditional groups of these administrative barriers, and the availability of services related to these regulatory economic procedures will also be determined below.

Problems of this approach

Management and regulation processes based on the introduction of administrative barriers as constraints have a number of serious drawbacks, which are reflected in the consequences that adversely affect the development and movement of the economy in the country. If we generalize these shortcomings as a whole, three points can be distinguished in the same way:

• First of all, there is such a problem that without lowering administrative barriers, society will undergo significant losses in terms of the economy. These losses can be clearly expressed (for example, price increases caused by an increase in the state regulatory apparatus costs of the manufacturer to carry out their activities, the introduction of additional duties, taxes, etc.etc.), and may not be so open (for example, indicators of gross domestic product may indicate insufficient production due to irrational and incorrect distribution and subsequent use of economic resources).

• It should also be noted that only the removal of administrative barriers will be able to give the state an impetus to use alternative, largely more productive methods of regulating the necessary economic processes. The presence of barriers does not mean at all that they successfully carry out the solution of those problems and tasks that initially implied their creation in principle.
• And finally, the current level of administrative barriers largely determines and influences the motives and actions of government officials who are increasingly guided by the principle of profitability in earning their income, as well as commercial enterprises and other structures located in them in possession. All of them, of course, have great benefits from direct involvement in business associated with economic barriers.

The main types of economic losses

The existence of administrative barriers in business, and especially in the economy, are undoubted social losses. They consist of two main types. Namely:

• The first type is the financial losses of those enterprises, which are faced with barriers placed at additional costs for items of expenditures determined by the need to overcome administrative barriers. A fairly impressive portion of these costs is subsequently converted to an increase in retail market prices, which is a direct economic loss to society.

• The second type is a decrease in the efficiency coefficient associated with the competent use and distribution of resources available in the country's reserves, as well as insufficient production of value. Administrative barriers in the economy are a factor that significantly complicates the process of new players entering the market, especially representatives of small or medium-sized businesses. This, in turn, helps to reduce the level of competition in the economic system, which, therefore, reduces the overall indicator of economic efficiency. These losses are indirect.

Direct losses are largely due to the fact that for the sake of at least the formal implementation of those rules that are established by the bodies that regulate the economic movement and set administrative barriers to entrepreneurial activity, business entities make a lot of extra, and sometimes excessive payments, which, moreover, can to be not only official and legal, but also shadow, that is, carried out illegally and / or not entering the budget of the state treasury. Moreover, the subjects do not pay for the economic resources themselves, but only for the right to use them, therefore, such costs are, by definition, transactional.

Examples

Here are a few examples for the sake of completeness of the topic considered in this article. Enterprise development and administrative barriers are antonyms, as evidenced by the following information.

Certification of various services, and especially goods, is a mandatory procedure that approximately 80% of all economic figures are required to follow. Moreover, according to financial estimates that correspond to the most minimal and proceeding from the direct standards of the relevant legislative bodies, the amounts that are spent on this procedure during one calendar year, according to rough estimates, amount to 130 million US dollars, and it comes from the commercial and industrial sectors.Moreover, it is safe to say that this is only the minimum, because many financial transactions that are not as direct as the direct costs of certification are not taken into account. So say after that, reducing administrative barriers to the economic component of the country will not do anything.

Licensing of certain types of economic activity can also be attributed to the representative of these regulatory barriers. Back in 2000, their number was about five hundred, but since then it has been constantly growing, and the list of these species is replenished, sometimes even by dividing any activity into its constituent parts.

It is clear that this division is completely unjustified. Moreover, despite the fact that the legislation of the Russian Federation expressly spells out the attitude to bodies having the right to issue licenses, only to such bodies as state and municipal, in fact, specially for these purposes, new and larger centers and enterprises are registered (belonging to certain regions, consisting of certain experts, etc.), which are mandatory for those economic entities that, in principle, rely on licensing. The creation of such completely redundant organizations is justified directly by the decisions of the governing bodies: most often local, although there are often cases when the Russian government itself issues a resolution regulating this issue, which extremely complicates the removal of administrative barriers even in the potential future.

Barrier Efficiency

The barriers we are considering today as a whole can be created by regulatory state bodies even because of the need to solve such managerial tasks of a general economic level, the solution of which, in principle, is an extremely useful step for the growth and development of the economic channel in the country. Incomes received by private individuals from administrative barriers and the availability of services in the field of regulating their activities are growing in accordance with the period of existence of the operated barrier, and this period, in turn, is determined by how much the subjects of economic relations are motivated to get rid of it yourself and the whole business community.

Barriers really work as originally conceived, only in situations where they oblige a large number of economic agents to contribute small amounts in order to overcome them. In this case, they really perform their functions and may even be useful for the development of the economy in the country, in contrast to rent-seeking schemes focused on rents, in which everything happens exactly the opposite and a small number of economic agents are forced to contribute extremely large sums of money for in order to comply with regulations that are excessive and harmful to them and their activities.

The main problems of eliminating barriers

It is important to consider that if the costs of a particular individual who follow the list of rules that dictate the economic barrier are generally quite small, then the costs that an economic society struggles with the same barrier can be several times larger that citizens are willing to spend dissatisfied with the existence of such an administrative problem on the market. It is for this reason that the problem of motivation remains acute, which many economic entities may simply not have in this regard.

In the case when the number of economic agents who are somehow affected by the problem of the concept of reducing administrative barriers and increasing the availability of services for the implementation of their entrepreneurial activity, becomes quite large,then they will have to deal with issues of unification and a joint solution to the problem that arose before them, which can be quite difficult both from the point of view of the human factor and from the legal side (referring to the difficulties in drafting official contracts governing joint activities in favor of solving this problem) .

Elimination of barriers

Thus, all citizens participating in the process of economic movement face one problem in the issue of getting rid of barriers per se - they need to combine their efforts and spend quite a lot of finances from the budget of their enterprises, which is almost impossible to implement. Therefore, reducing administrative barriers and increasing the availability of public services can only be carried out at the expense of the state itself or of some individual companies, behind which there are specific individuals or entities that have the ability to influence the course of solving the problem.

Speaking directly about the state, for the successful implementation of such a reduction, a number of serious changes must be introduced into the system of state control over the market and economic processes that will strengthen the protective mechanism of government supervision in relation to subjects of economic relations. These changes should look as follows. It is necessary:

• Create a clearly prescribed and regulated list of the closed type, which will include all the authorities having the right to control the economic activity of any enterprises, as well as separately write down all their functions and capabilities in order to avoid any repetition. To accomplish this, it is necessary to carry out colossal labor activities aimed at changing all legal regulations governing the work of such bodies.
• Carefully spell out all the main stages and subtleties relating to the implementation of checks by these bodies of the economic activity of the enterprise. This is necessary in order to minimize the risks of the unfair use of controlling and supervisory mechanisms in order to exert pressure on the entities being inspected, as well as to avoid cases of direct financial extortion.
• To create an opportunity for carrying out procedures related to control and supervision, on the principle of gratuitousness, without the need for large payments by audited entities.
• Create an opportunity for all of these entities to appeal the results or processes of inspections.
• To minimize the number of those inspections that are enforced on the basis of the personal initiative of any executive bodies. Here it is understood that inspections should be carried out only if reasonably lodged complaints are submitted to the enterprise by its consumers or competitors.

It is important to understand that all these points can be implemented in accordance with all regulatory legal (and also necessary for revision) documents only if certain specific measures and conditions are met, which are as follows:

1. All economic entities that participate in the reformation process and support the concept of lowering administrative barriers should act actively and create levers of pressure and responsibility that will prevent the state regulatory apparatus from acting without legal grounds. Here, an important role can be played by such a process as the socialization of business.
2. The government must act decisively and steadily in order to ultimately achieve the necessary result, as well as to get rid of the risks of lobbying the interests of those categories of civil servants who regard administrative barriers with reverence due to whatever they receive from them (most often,Of course, monetary) personal gain.
3. It is necessary to create a system responsible for resolving disputes and economic conflicts that will protect the interests of individuals as well, not just state ones, as it is now done due to the fact that any troubles are resolved exclusively in a judicial procedure, in which an unfair outcome of the process is possible.

Total

Thus, in this article, an economic problem such as administrative barriers was considered. This problem needs to be solved, and some actions to solve it have already been taken, including by the state, although without global changes as a whole. To summarize several conclusions:

1. Administrative barriers as a way in which government bodies control the processes of economic movement is a system that is devoid of any efficiency and leads to excessive costs on the part of entities that somehow shape the entire market with its prices and the ratio of supply and demand, as well as unproductive use and distribution of country resources.
2. The number of barriers is constantly increasing due to the fact that new ones must ensure the effectiveness of obsolete old ones, but subsequently turn out to be even less necessary than them. And with the increase in the number of working barriers, the sum of costs also grows.
3. A significant part of government representatives is interested in keeping the barriers in force, which leads to lobbying for interests in removing administrative barriers.
4. Only cardinal decisions and steps that the state itself must take directly can change the entire system. It is important for the government to understand that maintaining barriers is beneficial only to a certain circle of its people, while the real economy of the whole country begins to suffer because of this, which affects both domestic and foreign policy, and the citizens of the Russian Federation, and many others aspects of the life of our society.

One way or another, this article resolved some issues related to the topic considered today. Lowering administrative barriers is a necessary measure, but, unfortunately, is practically impossible until certain actions are taken by managers and implementing procedures for monitoring and supervising the economic activity of any enterprises, including all that was listed in this article, in its relevant sections, as well as much more, which you can learn about in a more detailed study of this topic.