The Concept of Red Tapes, and its Impact on the Business Environment

According to private sector activists as well as politicians, red tapes have always been considered as the main obstacles to economic development and national production. However, there is no agreement on which regulations are being qualified as red tape. This paper argues red tape is caused by violating the legislative (or in a more general sense, regulation-related) principles. In such a situation, the legislators adopt new laws or amended legislation frequently and early, and as a result, economic activists are faced with uncertain and unpredictable environment. Obscure and difficult legislation; regulation without sufficient attention to, or knowledge of, the existing legal system; the legislative sectoralization; and repeatedly amended laws, are acontradict the legislative principles.
The paper concludes that the number of laws and regulations rather than the costs of those who identify laws and regulations should be considered as main indicators for red tape. Thus it is appropriate to consider legislations and regulations in terms of volume, issue, and the type, and category, and then drawing an exact methodology, administrative costs for the businesses are evaluated.