Chapter 3 Making progress

a broad domain, from contract enforcement, business regulation and taxation to finance, electricity supply, and labor markets. Governments typically administer each area in isolation, distributing responsibilities across a range of ministries and agencies. In contrast, firms tend to view particular investment opportunities as a package, and government policies and behaviors that influence the costs, risks, and barriers to competition are part of that package. Why might this matter? 3.5 First, the impact of any partic ular policy improvement will depend on the extent to which it addresses a constraint that is binding on firms. So improving access to credit will not have much impact on firms' investment decisions until more fundamental concerns about the security of their property rights have been addressed ---an effort described as "pushing on a string." Special tax incentives may not be enough to compensate for other weaknesses in the investment climate in some situations---whil