This paper explores cross-country differences in the design of insolvency regimes, based

on quantitative indicators constructed from countries’ responses to a recent OECD policy

questionnaire. The indicators – which are available for 36 countries for 2010 and 2016 –

aim to better capture the key design features of insolvency which impact the timely

initiation and resolution of personal and corporate insolvency proceedings. According to

these metrics, the design of insolvency regimes varies significantly across countries, with

important differences emerging with respect to the treatment of failed entrepreneurs, the

availability of preventative and streamlining tools and ease of corporate restructuring.

While a comparison of indicator values for 2010 and 2016 imply that recent reform

efforts have improved policy design, there remains much scope to reform insolvency

regimes in many OECD countries. This is particularly significant in light of

complementary analysis which shows that the design of insolvency regimes is relevant

for understanding three inter-related sources of contemporary labour productivity

weakness: the survival of “zombie” firms, capital misallocation and stalling technological

diffusion.