Former Mexican President Felipe Calderón shares insight into the impact of bureaucracy, Adam Smith Center releases research findings

As a global leader, former Mexican President Felipe Calderón has seen how red tape can hinder economic growth and impact public policy.

Calderón, who is now a senior leadership fellow at FIU’s Adam Smith Center for Economic Freedom, recently gathered with students, faculty and community members at the university to discuss his experiences with bureaucracy while he served as president of Mexico.

“I learned [that] the regulatory framework and bureaucracy are like trees,” Calderón said. “Every single year there is a new circle around the tree [trunk]… and that implies that the tree is growing, growing and growing. Every single administration establishes its own new circle of bureaucracy and regulatory framework.”

As years go by, even policymakers themselves may discover they don’t know why a particular regulation exists, he said.

Calderón set out to understand how red tape was crippling innovation. “First, we analyzed carefully with a special unit what were the steps that anyone needed to take to open a business at the federal level… It was clear that it was a complicated process…”

He led a variety of measures during his presidency to reduce such bureaucratic barriers. For example, he launched an online platform that allowed citizens to fulfill the requirements for starting a business at the federal level — effectively cutting the number of days it took to fulfill various requirements from 58 days to nine days. Another example: His administration launched a contest called “El Trámite Más Inútil” (“The Most Useless Procedure”), in which citizens were invited to submit examples of excessive or pointless government procedures.

Calderón’s conversation was part of an Adam Smith Center event in which the team shared research findings from its Index of Bureaucracy 2025 study.

Four years ago, the center began its work on the project by analyzing the impact of bureaucracy on businesses in six Latin American countries. Today, the study has flourished into a groundbreaking analysis of the bureaucratic burden businesses face across 21 countries in Latin America, the Caribbean and Europe. This year’s analysis looked at Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Italy, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Trinidad and Tobago and Uruguay. 

“What decisively distinguishes this 2025 edition is its focus on medium-sized businesses, often underestimated or overlooked in statistics, but which are essential to the productive architecture due to their ability to generate quality employment, drive innovation and attract investment,” said Carlos Díaz-Rosillo, founding director of the Adam Smith Center for Economic Freedom.

By measuring the hours businesses spend navigating regulatory procedures, from starting a business to ongoing operations, the index reveals how bureaucracy stifles productivity, investment and innovation.

The findings from the 2025 report reveal that:

• Opening and formally registering a medium-sized company requires an average of 1,850 hours, the equivalent of 231 workdays or nearly eight months dedicated exclusively to administrative procedures.
• Ongoing compliance demands an average of 1,577 hours per year, equal to 190 workdays. That means bureaucratic requirements consume 76% of an employee’s annual working time.

“Having updated empirical evidence is key to guiding effective public decisions, particularly those that have a direct impact on the business climate, investment and sustainable development,” said Sary Levy Carciente, author and coordinator of the index.

The results emphasize the urgent need for governments to streamline processes, eliminate redundancies and leverage new technologies to strengthen competitiveness while safeguarding democratic governance and individual freedoms.

Beyond economics, the report highlights the political costs of excessive red tape.

“Excessive bureaucracy ultimately weakens popular sovereignty and undermines trust in public institutions, making its reform a priority for economic and social progress,” said Paulo S. Uebel, who previously served as special secretary for debureaucratization, administration and digital government at the Ministry of the Economy in Brazil.