BOGOTÁ, Colombia, September 2026. In Latin America, having a business idea does not always mean being able to turn it into reality. A small business looking to export may face processes that take too long; a street vendor may have authorization to work in public spaces but no clear pathway to increase their income; and a company with the capacity to produce may have to wait months to obtain a license.
These situations are different, but they point to the same challenge: there is still a significant gap between what the rules say and what people and businesses are actually able to do.
This was one of the key findings of “LATAM Sin Barreras: A Regional Forum on Economic Freedoms,” held on September 17 at the Bogotá Chamber of Commerce. The forum was led by the Center for International Private Enterprise (CIPE) in partnership with the Bogotá Chamber of Commerce and the Colombian Committee of the International Chamber of Commerce (ICC Colombia).
The event featured Dr. Norman Loayza, Director of the World Bank’s Global Indicators Group, who leads the institution’s work on business environment and regulatory indicators, who delivered the keynote address on economic freedom and moderated the panel “Regional Challenges in Economic Freedom, Competitiveness, and Human Development.”
“Economic freedom must be built on strong institutional foundations, including security and justice, a supportive business environment, and human capital, in order to foster development and strengthen the resilience of nations. Singapore and South Korea offer compelling examples. In the mid-20th century, their average per capita incomes were at, or even below, levels observed in Latin America. Today, both are high-income economies and recognized examples of economic development,” said Dr. Loayza.
The forum brought together research from leading think tanks in Argentina, Bolivia, Colombia, El Salvador, and Guatemala to address a common question: How easy is it to work, start a business, produce, invest, and grow under existing rules?
Five Countries, Five Challenges with Common Patterns
The research presented at the forum shows how these challenges take different forms depending on each country’s circumstances.
In Colombia, the challenge lies in the gap between regulating an activity and creating opportunities for those who engage in it. The Centro de Estudios Manuel Ramirez (CEMR) from Colombia found that more than 23,400 street vendors were registered in Bogotá between 2001 and 2024. This represents only around 1% of the total number of existing street vendors, which means that only a small percentage of them had been connected to opportunities to help them increase their income, strengthen their business, access markets, or move toward formalization.
In Bolivia, the focus is on how small businesses can grow and become more competitive. Research by Fundación Milenio found a relationship between informality, low productivity, and constraints on business growth. From this perspective, formalization should not be reduced to meeting regulatory obligations; it should translate into concrete opportunities to access financing, markets, investment, and expansion.
In El Salvador, the challenge is turning trade openness into greater opportunities for businesses. Trade in goods and services (imports + exports) increased from 49.6% of GDP in 1990 to 88.2% in 2025. Yet only 6.2% of formal businesses exported goods in 2022. Small firms accounted for 86% of exporting businesses but represented only 4% of total export value. Research by the Asociación Salvadoreña para el Desarrollo Económico y Social (FUSADES) points to a key challenge: reducing costs and making it easier for more businesses, particularly small firms, to participate in international trade.
In Guatemala, the problem can be seen in the gap between official processing times and the time required in practice to obtain a sanitary license. A study by the Centro de Investigaciones Económicas Nacionales (CIEN) found that in 2025, obtaining one could take between five and eight months, despite an official timeframe of 15 to 20 business days. When this gap becomes routine, a procedure designed to regulate an activity can ultimately become an obstacle to it.
In Argentina, the regulatory burden is a particularly significant barrier for small businesses. Research by The Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento (CIPPEC) identified 150 taxes and fees, 82 of which are levied at the municipal level. The challenge, the study notes, is not only the number of obligations but also how they are designed: applying similar requirements to businesses of different sizes or levels of risk can create disproportionate costs for those with more limited capacity.
A Regional Agenda to Make Rules Work
Building on the five country cases, CIPE, through “LATAM Sin Barreras,” seeks to strengthen a network of experts, business associations, and think tanks across Latin America that can help advance a regional agenda focused on concrete actions, including:
- Listening to people engaged in economic activities and experiencing the effects of regulations firsthand before regulations are designed or amended.
- Strengthening the technical capacity of local and regional institutions, particularly where institutional gaps are greatest.
- Simplifying governmental procedures before moving toward digitization and interoperability.
- Making requirements, costs, responsible authorities, and processing times clear and predictable.
- Assessing the impact of new regulations both before and after implementation.
- Creating permanent spaces for dialogue among institutions, businesses, and economic stakeholders.
- Improving coordination across institutions and territories to prevent fragmented or contradictory processes.
Measuring Economic Freedom in a Regional Context
The analysis of the five case studies, together with a regional study by CEMR, showed that international indexes currently used to measure economic freedom do not always capture the particular circumstances and realities of Latin American countries.
Based on this finding, CIPE proposes developing a new analytical and conceptual framework to study and measure economic freedoms in the region. The approach seeks to move beyond a traditional view focused solely on the recognition of these freedoms in laws and regulations and instead understand them as an ecosystem in which institutional, legal, and economic circumstances coexist and determine the level of economic freedom.
“We need to expand this joint work on economic freedom to include other countries while continuing to explore how best to measure it. What is not measured is difficult to track and improve. We also need to strengthen collaboration among think tanks across the region to identify common barriers, develop policy solutions, and promote shared learning while taking into account the particularities of each country,” concluded Andrew Wilson, CIPE executive director.
Click here to watch an explainer video on economic freedom, developed by the Colombian media outlet La Silla Vacía in partnership with CIPE.
Published Date: September 24, 2026