Entrepreneurs in Slovakia spend 140 hours annually complying with bureaucratic red tape

Small entrepreneurs in Slovakia spend 140 hours annually — about 17.5 full working days — navigating the country’s complex regulatory red tape. That’s one of the startling findings from the new “Bureaucracy Index” launched by the Institute of Economic and Social Studies (INESS), an Atlas Network partner based in Slovakia. Those 140 hours of regulatory grappling include an average of 75 administrative tasks that cost €1,471.50 (US$1,565.31) per year.

“The Bureaucracy Index is a simple and transparent quantification of the proverbial ‘red tape,’ which is mentioned daily in media, but rarely in any quantitative terms,” said Richard Durana, director of INESS. “The press conference devoted to the presentation of the Bureaucracy Index results and the announcement of the International Bureaucracy Day was a great success, gaining the attention of 10 different national broadcast and print media representatives and featured in 14 outlets, including live discussion in the country’s most popular daytime radio talk show.”

INESS chose the birthday of Ludwig von Mises to hold its International Bureaucracy Day, because Mises was the first economist to study bureaucracy systematically. “All should remember on this day how much time they have spent filling in papers and whether they can do something [else] with that,” said INESS analyst Martin Vlachynský. The organization plans to hone its index moving forward so that differences in the bureaucratic burden over time can be tracked, and the government’s attempts to improve the business environment assessed.

INESS has also been active in other areas to advance liberty, working with the Lithuanian Free Market Institute and the Institute for Market Economics (IME) to write a study that examines the sharing economy in Central and Eastern Europe. Titled “Less Regulation, More Reputation!,” the study examines private providers of traditionally public services, and how their incentives align to introduce private regulations that promote the general welfare. Private regulation also enables feedback through a “competition discovery processes,” which aids the development of sound regulation. The authors of the study also argue that private regulations often decrease the transaction costs of regulation by developing innovative solutions, such as online reputation mechanisms.

“INESS has organized two workshops for journalists (one dedicated to public finance, another to regulations) and participated in conferences about the business environment in Bratislava and about new crypto technologies in Prague,” Durana said. “We were delighted to also host special guests in our office — a group of small private entrepreneurs (‘cuentapropistas’) from Cuba, who came to learn about economic transformation and development of the business environment.”

The recently published 10th edition of “The Universe of Public Expenditures” is a data visualization of the Slovakian government’s budget allocation, which will be distributed by INESS to more than 300 high schools throughout Slovakia. Furthermore, the organization held its seventh iteration of the “Seminar of Austrian Economics” in October, hosting 25 students and 11 lecturers over four days. INESS also recently held its first intensive Political Academy for 30 up-and-coming Slovakian politicians of various political affiliations.

“In order to build more competent politicians and fact-based politics, nine lecturers led by the ex-prime minister of Slovakia, the famous reformer Mr. Mikulas Dzurinda, held sessions on public finance, the financial system, the business environment, and also communications, strategy, political campaigning, and more,” Durana said. “Top Slovak experts spoke on each topic, and discussed and led workshops at the academy. In 2017, the second semester of the Political Academy will be launched.”