The Impact of Regulations on Doing Business in the Pacific Islands: The Case of Fiji

The shared aspiration and pursuit of stable and sustained economic growth through private enterprises in the Pacific Island Countries face unique challenges. Besides the inherent characteristics of size, remoteness and vulnerability traditionally associated with small island states, the challenges include political instability, the absence of enforceable land-based property rights, weak public infrastructure, uncertain contractual enforcement and archaic and unstable regulatory frameworks. The varied combinations of these challenges have constrained the growth of private enterprises. This thesis focuses on a challenge that has not captured the attention of scholars, that is, the quality of the region‘s business regulatory environment. The Doing Business analyses by the World Bank have consistently ranked Fiji outside the top 100 with respect to the ease of starting a business. Furthermore, the country‘s global ranking in this area continues to deteriorate. Following an exploratory-descriptive research approach using Doing Business data, the study findings show that Fiji has one of the region‘s weakest regulatory frameworks, especially for facilitating the survival of an enterprise. The business licensing renewal process with local governments contributes to unwarranted levels of red tape. Analysis of survey data collected specifically for this thesis reveals the negative influence of red tape, arising out of licensing renewals, on firm performance in the garment industry. Finally, a phenomenological analysis of industry experiences with licensing compliance at the local level reveals the problems faced by most in the industry. Contributions from this research to the literature include the novel use of local government-related licensing data for studying the regulatory-enterprise relationship; establishing the prevalence of all four types of red tape from Bozeman‘s theory—that is ordinary, intraorganisational, external control and pass through—in local governments; and the new empirical findings based on ...