What Is Red Tape?

There are several definitions of red tape ranging from excessive regulation or rigid conformity to formal rules that is considered redundant or bureaucratic and hinders or prevents action or decision-making  to "bureaucratic practice of hair splitting or foot dragging, blamed by its practitioners on the system that forces them to follow prescribed procedures to the letter".

 

Briefly, red tape can be explained as:

  • Non-essential procedures, forms, licences, and regulations that add to the cost of dealing  with government, or
  • Anything obsolete, redundant, wasteful or confusing that diminishes the competitiveness of the Province, which stands in the way of economic growth and job creation or wastes taxpayers’ time and money.

 

(“Red Tape to Red Carpet Strategy 2011 – 2015” of the Western Cape Department of Economic Development and Tourism, 2011).

 

The cost of red tape and regulation

Red tape within government has consistently been identified as one of the core elements which restrict business development and growth. Research into red tape and its reduction has shown some interesting and disturbing facts, which include:

  • Developing countries can improve their annual growth rates by creating a more enabling environment (World Bank, 2004)
  • Red tape cost South Africans R79 billion in 2004. This is equivalent to 6.5% of GDP or 16.5% of the total wage bill in 2003 (Small Business Project (SBP) 2005).

 

The common themes that have arisen from our research highlight issues identified by businesses in their interactions with all tiers of government:

  • Attitude of strict compliance rather than assistance by officials
  • Lack of co-ordination among agencies and departments
  • Lack of clarity about the government's objectives, processes and timeframes
  • Lack of transparency in decision-making
  • Inconsistency in interpretation of rules
  • Disconnect between regulator and business
  • Lack of accountability and ownership of decision making.