The Administrative Burden of Doing Business with the Government: Learning and Compliance Costs in Business-Government Interactions

Administrative burdens are widespread and likely to generate unequal opportunities in access to government programs and other important entitlements. Whereas a large body of research has examined administrative burdens in citizen-state encounters, little is known either theoretically or empirically about burdens in business–government interactions. In this article, we argue that private businesses, just like individual citizens, experience administrative burdens in encounters with the government, and that these burdens are the result of bureaucratic procedures as well as the administrative capital resources in the businesses themselves. We present empirical evidence from an original study of Danish businesses' learning and compliance costs in government purchasing contracts. The findings suggest that businesses' learning and compliance costs are shaped more by bureaucratic procedures and requirements than by the administrative capital resources businesses can mobilize in response. We propose steps governments can take to reduce administrative burdens and harness public values in business-government interactions.