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In Peru, the business safety inspection process, a requirement to obtain an operating license, is characterized by misaligned incentives and high transaction costs. These inefficiencies disproportionally affect micro, small, and medium enterprises (MSMEs) because of the firms’ lack of resources or know-how to navigate the inspection procedures effectively. MSMEs are important for the economy, representing 99.5 percent of firms, employing up to 89...
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