Ease of doing business index

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The ease of doing business index is an index created by the World Bank.[1] Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights. Empirical research funded by the World Bank to justify their work show that the effect of improving these regulations on economic growth is strong.[2]

"Empirical research is needed to establish the optimal level of business regulation—for example, what the duration of court procedures should be and what the optimal degree of social protection is. The indicators compiled in the Doing Business project allow such research to take place. Since the start of the project in November 2001, more than 800 academic papers have used one or more indicators constructed in Doing Business and the related background papers by its authors."[3]

Methodology[edit]

The index is based on the study of laws and regulations, with the input and verification by more than 9,600 government officials, lawyers, business consultants, accountants and other professionals in 185 economies who routinely advise on or administer legal and regulatory requirements.

The ease of doing business index is meant to measure regulations directly affecting businesses and does not directly measure more general conditions such as a nation's proximity to large markets, quality of infrastructure, inflation, or crime. A nation's ranking on the index is based on the average of 10 subindices:

  • Starting a business – Procedures, time, cost and minimum capital to open a new business
  • Dealing with construction permits – Procedures, time and cost to build a warehouse
  • Getting electricity – procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse
  • Registering property – Procedures, time and cost to register commercial real estate
  • Getting credit – Strength of legal rights index, depth of credit information index
  • Protecting investors – Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
  • Paying taxes – Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of gross profit
  • Trading across borders – Number of documents, cost and time necessary to export and import
  • Enforcing contracts – Procedures, time and cost to enforce a debt contract
  • Resolving insolvency – The time, cost and recovery rate (%) under bankruptcy proceeding

The Doing Business project also offers information on following datasets:

  • Distance to frontier - Shows the distance of each economy to the “frontier,” which represents the highest performance observed on each of the indicators across all economies included in Doing Business since each indicator was included in Doing Business
  • Entrepreneurship - Measures entrepreneurial activity. The data is collected directly from 130 company registrars on the number of newly registered firms over the past seven years
  • Good practices - Provide insights into how governments have improved the regulatory environment in the past in the areas measured by Doing Business
  • Transparency in business regulation - Data on the accessibility of regulatory information measures how easy it is to access fee schedules for 4 regulatory processes in the largest business city of an economy

For example, according to the Doing Business (DB) 2013 report, Canada ranked third on the first subindex "Starting a business" behind only New Zealand and Australia. In Canada there is 1 procedure required to start a business which takes on average 5 days to complete. The official cost is 0.4% of the gross national income. There is no minimum capital requirement. By contrast, in Chad which ranked among the worst (181st out of 185) on this same subindex, there are 9 procedures required to start a business taking 62 days to complete. The official cost is 202% of the gross national income per capita. A minimum capital investment of 289.4% of the gross national income per capita is required.

While fewer and simpler regulations often imply higher rankings, this is not always the case. Protecting the rights of creditors and investors, as well as establishing or upgrading property and credit registries, may mean that more regulation is needed.

Research and influence[edit]

More than 800 academic papers have used data from the index.[4] The effect of improving regulations on economic growth is claimed to be very strong. Moving from the worst one-fourth of nations to the best one-fourth implies a 2.3 percentage point increase in annual growth.

The various sub-components of the index in themselves provide concrete suggestions for improvement. Many of them may be relatively easy to implement and uncontroversial (except perhaps among corrupt officials who may gain from onerous regulations requiring bribes to bypass). As such, the index has influenced many nations to improve their regulations. Several have explicitly targeted to reach a minimum position on the index, for example the top 25 list.

Somewhat similar annual reports are the Indices of Economic Freedom and the Global Competitiveness Report. They, especially the later, look at many more factors that affect economic growth, like inflation and infrastructure. These factors may however be more subjective and diffuse since many are measured using surveys and they may be more difficult to change quickly compared to regulations.

According to some critics, however, some of the research lacks the rigor of a coherent economic theory, contains unstated ideological biases, and too much of it is undertaken by individuals closely associated with the index and reforms, so it is not sufficiently independent to be fully credible.[5] This blanket criticism is often offered by those with their own ideological bias.

Doing business 2013[edit]

Doing Business 2013 covers regulations measured from June 2011 through May 2012. The report marks the 10th edition of the Doing Business series. Over the past decade, these reports have recorded nearly 2,000 regulatory reforms implemented by 180 economies.

  • Poland was the global top improver in the past year. It enhanced the ease of doing business through four institutional or regulatory reforms, making it easier to register property, pay taxes, enforce contracts, and resolve insolvency.
  • Besides Poland, nine other economies are recognized as having the most improved ease of doing business across several areas of regulation as measured by the report: Sri Lanka, Ukraine, Uzbekistan, Burundi, Costa Rica, Mongolia, Greece, Serbia, and Kazakhstan.
  • Worldwide, 108 economies implemented 201 regulatory reforms in 2011/12 making it easier to do business as measured by Doing Business. Reform efforts globally have focused on making it easier to start a new business, increasing the efficiency of tax administration and facilitating trade across international borders. Of the 201 regulatory reforms recorded in the past year, 44% focused on these 3 policy areas alone. Read about reforms.
  • Singapore topped the global ranking on the ease of doing business for the seventh consecutive year, followed by Hong Kong SAR, China; New Zealand; the United States; and Denmark. Georgia was a new entrant to the top 10. View the rankings.

Doing business 2014[edit]

Doing Business 2014 covers regulations measured from June 2012 through May 2013 in 189 economies. The report marks the 11th edition of the Doing Business series.

  • Singapore is the first economy of the global ranking followed by Hong Kong SAR, China, New Zealand, the United States, Denmark, Malaysia, the Republic of Korea, Georgia, Norway, and the United Kingdom.
  • For the first time data about Libya, Myanmar, San Marino, and South Sudan were collected.
  • 114 economies adopted 238 regulatory reforms in 2012/13 (the reforms increased of 18% compared to the previous year).
  • 9 of the 20 economies that reduced the distance with the regulatory frontier the most (since 2009s) are located in Sub-Saharan Africa.

Criticism[edit]

The Doing Business methodology regarding labor regulations was criticized by the International Trade Union Confederation because it favored flexible employment regulations.[6] In early reports, the easier it was to dismiss a worker for economic reasons in a country, the more its rankings improved. The Employing Workers index was revised in Doing Business 2008 to be in full compliance with the 188 International Labour Organization conventions. It has subsequently been removed from the rankings. The ITUC debuted the Global Rights Index in 2014 as a response to the Doing Business report.[7]

In 2008 the World Bank Group's Independent Evaluation Group, a semi-independent watchdog within the World Bank Group, published an evaluation of the Doing Business index.[8] The report, Doing Business: An Independent Evaluation, contained both praise and criticism of Doing Business. The report recommended that Doing Business be clearer about what is and is not measured, disclose changes to published data, recruit more informants, and simplify the Paying Taxes indicator.

In April 2009 the World Bank issued a note with revisions to the Employing Workers index.[9] The note explained that scoring for the Employing Workers indicator would be updated in Doing Business 2010 to give favorable scores for complying with relevant ILO conventions. The Employing Workers indicator was also removed as a guidepost for Country Policy and Institutional Assessments, which help determine resources provided to IDA countries.

A study commissioned by the Norwegian government alleges methodological weaknesses, an uncertainty in the ability of the indicators to capture the underlying business climate, and a general worry that many countries may find it easier to change their ranking in Doing Business than to change the underlying business environment.[5]

In June 2013, an independent panel appointed by the President of the World Bank and headed by Trevor Manuel of South Africa, issued a review expressing concern about the potential for the report and index to be misinterpreted, the narrowness of the indicators and information base, the data collection methodology, and the lack of peer review. It recommended that the report be retained, but that the aggregate rankings be removed and that a peer-review process be implemented (among other things). Regarding the topics of Paying Taxes and Employing Workers, it noted that "The latter has already been excluded from the report's rankings. While there is a persuasive case for paying attention to these aspects of doing business, the Bank will need to carefully consider the correct way to assess the regulation and legal environment of these areas if these indicators are to be retained." [1]

The Doing Business criteria for measuring the time needed to complete a procedure were based on some simplified assumptions: "It is assumed that the minimum time required for each procedure is 1 day. Although procedures may take place simultaneously, they cannot start on the same day (that is, simultaneous procedures start on consecutive days)". These assumptions generated some criticisms especially by countries that were able to complete one or more procedures simultaneously and could therefore be penalized in the final rank. World Bank claimed that the same criteria are applied to all economies and therefore would not produce biased results. In 2014 the possible biases in applying the DB time indicator were mathematically demonstrated in a scientific article[10] appeared on the Rivista italiana di economia demografia e statistica (Italian Review of Economics, Demography and Statistics - RIEDS). World Bank partially reviewed the criteria inserting a new assumption for telematics procedures: "each telematics procedure accounts for 0.5 day instead of one day (and telematics procedures can also take place simultaneously)".

Ranking[edit]

The most recent rankings come from the "Doing Business 2013" report.[11] Ranking of economies was introduced in the "Doing Business 2006" report.

Singapore has topped the Ease of Doing Business rankings.[12] Based on Singapore's experience, IDA International is collaborating with public agencies in several countries in the areas such as ICT strategy, national infocomm planning and solutions implementation that can help increase the ease of doing business.

2014 2013 2012 2011 2010 2009 2008 2007 2006 Country/region
1 1 1 1 1 1 1 1 1  Singapore
2 2 2 2 2 2 4 4 4  Hong Kong
3 3 3 3 3 3 2 2 2  New Zealand
4 4 4 5 4 4 3 3 3  United States
5 5 5 6 6 5 5 6 6  Denmark
6 12 18 21 23 21 23 20 17  Malaysia
7 8 8 16 19 23 22 19 20  South Korea
8 9 9 12 13 16 20 38 98  Georgia
9 6 6 8 10 10 9 9 8  Norway
10 7 7 4 5 6 6 5 5  United Kingdom
11 10 15 10 9 9 10 10 10  Australia
12 11 11 13 16 14 13 13 13  Finland
13 14 16 15 14 11 12 12 12  Iceland
14 13 14 14 18 17 14 14 16  Sweden
15 15 10 9 7 7 7 8 9  Ireland
16 16 25 33 46 61 58 54 44  Taiwan
17 27 27 23 26 25 28 22 22  Lithuania
18 18 17 19 12 12 19 23 23  Thailand
19 17 13 7 8 8 8 7 7  Canada
20 19 23 20 17 24 29 32 31  Mauritius
21 20 19 22 25 27 21 17 15  Germany
22 21 24 17 24 22 18 18 18  Estonia
23 26 33 40 33 47 55 59 51  United Arab Emirates
24 25 21 24 27 29 26 24 28  Latvia
25 23 22 38 32 69 79 93 83  Macedonia
26 22 12 11 13 15 25 36 34  Saudi Arabia
27 24 20 18 15 13 11 11 11  Japan
28 31 31 30 30 28 27 25 25  Netherlands
29 28 26 27 21 19 15 15 14   Switzerland
30 29 32 32 28 26 24 21 21  Austria
31 30 30 31 48 48 43 44 50  Portugal
32 52 45 58 67 143 148 145 132  Rwanda
33 35 37 42 53 57 64 52 42  Slovenia
34 37 39 43 49 40 36 34 29  Chile
35 38 34 29 29 30 30 26 26  Israel
36 33 28 25 22 20 16 16 19  Belgium
37 32 55 48 43 50 41 42 41  Armenia
38 34 29 26 31 31 31 30 36  France
39 36 40 37 40 36 .. .. ..  Cyprus
40 41 43 47 35 33 32 27 27  Puerto Rico
41 39 35 34 34 32 35 31 30  South Africa
42 43 41 36 56 65 54 51 55  Peru
43 45 42 39 37 49 67 74 63  Colombia
44 51 56 66 71 77 80 72 ..  Montenegro
45 55 62 70 72 72 71 64 56  Poland
46 42 38 28 20 18 17 .. ..  Bahrain
47 47 49 57 65 60 57 50 45  Oman
48 40 36 50 39 37 38 .. ..  Qatar
49 46 48 41 42 35 37 33 32  Slovakia
50 49 47 59 63 64 81 76 77  Kazakhstan
51 50 46 55 69 73 82 78 68  Tunisia
52 44 44 49 62 51 46 41 38  Spain
53 48 53 35 51 55 42 40 58  Mexico
54 54 51 46 47 41 50 46 46  Hungary
55 61 61 72 77 83 76 70 57  Panama
56 59 54 52 45 39 53 48 40  Botswana
57 60 61 71 52 46 40 37 33  Tonga
58 66 59 51 44 42 44 47 48  Bulgaria
59 79 83 112 96 94 84 .. ..  Brunei
60 56 50 45 64 53 47 .. ..  Luxembourg
61 57 60 61 57 68 52 45 39  Samoa
62 60 77 62 54 43 34 29 24  Fiji
63 58 69 68 58 82 115 122 107  Belarus
64 53 52 53 36 34 33 28 ..  Saint Lucia
65 73 87 80 78 74 59 58 43  Italy
66 69 68 97 81 78 70 67 ..  Trinidad and Tobago
67 64 63 67 92 87 83 100 88  Ghana
68 70 70 44 41 80 100 96 90  Kyrgyzstan
69 71 71 65 73 63 60 71 60  Turkey
70 67 66 54 38 38 96 94 84  Azerbaijan
71 63 57 64 50 44 39 35 ..  Antigua and Barbuda
72 78 100 109 109 100 108 97 87  Greece
73 72 72 56 55 45 45 49 62  Romania
74 80 76 60 59 58 68 61 47  Vanuatu
75 65 64 63 74 66 66 68 59  Czech Republic
76 76 86 73 60 56 56 60 52  Mongolia
77 68 65 88 83 76 72 66 ..  Dominica
78 83 81 90 94 108 92 84 69  Moldova
79 93 97 101 110 117 116 111 101  Guatemala
80 74 103 95 111 105 93 79 ..  Seychelles
81 .. .. .. .. .. .. .. ..  San Marino
82 75 75 75 70 62 61 55 ..  Saint Vincent and the Grenadines
83 94 84 76 90 99 101 90 73  Zambia
84 77 85 77 68 59 51 .. ..  Bahamas
85 81 89 102 105 97 103 101 81  Sri Lanka
86 98 117 119 113 107 .. .. ..  Kosovo
87 97 94 114 128 130 129 115 102  Morocco
88 89 90 124 114 109 113 98 92  Uruguay
89 84 80 84 103 110 105 116 115  Croatia
90 85 82 82 82 89 136 132 119  Albania
91 88 .. .. .. .. .. .. ..  Barbados
92 112 120 123 120 118 111 107 95  Russia
93 86 92 89 88 90 91 83 78  Serbia
94 90 88 81 75 67 62 57 49  Jamaica
95 95 79 85 87 71 69 65 54  Maldives
96 91 91 79 89 86 90 88 89  China
97 92 74 96 104 96 85 77 65  Solomon Islands
98 87 78 69 66 54 49 39 35  Namibia
99 99 98 78 93 91 87 92 75  Vietnam
100 111 116 120 97 92 88 75 64  Palau
101 96 95 87 76 70 63 53 ..  Saint Kitts and Nevis
102 110 121 125 121 120 117 120 105  Costa Rica
103 102 .. .. .. .. .. .. ..  Malta
104 82 67 74 61 52 48 43 37  Kuwait
105 108 107 116 123 123 112 103 80    Nepal
106 105 93 99 80 75 65 56 ..  Belize
107 100 73 92 91 88 73 62 ..  Grenada
108 138 136 148 144 141 135 129 113  Philippines
109 103 102 106 124 122 109 113 100  Paraguay
110 107 105 83 85 85 74 69 61  Pakistan
111 115 104 113 108 101 98 91 74  Lebanon
112 137 152 145 142 145 144 138 124  Ukraine
113 104 101 103 102 95 89 82 66  Papua New Guinea
114 101 106 108 98 93 86 81 70  Marshall Islands
115 114 114 100 101 98 95 86 72  Guyana
116 130 126 127 129 127 126 114 99  Brazil
117 116 108 91 86 102 104 109 96  Dominican Republic
118 113 112 86 84 81 77 73 67  El Salvador
119 106 96 111 100 104 94 85 76  Jordan
120 128 129 121 122 129 127 131 114  Indonesia
121 122 119 132 146 147 137 126 ..  Cape Verde
122 117 115 93 79 79 75 63 53  Kiribati
123 123 124 118 115 114 99 87 ..  Swaziland
124 119 118 117 117 113 97 89 79  Nicaragua
125 127 111 104 107 111 110 99 93  Ethiopia
126 124 113 115 118 112 102 95 85  Argentina
127 125 128 131 141 136 134 133 121  Honduras
128 109 110 94 106 116 125 143 126  Egypt
129 121 109 98 95 84 78 80 71  Kenya
130 129 122 107 119 115 106 102 82  Bangladesh
131 126 125 110 116 119 118 110 94  Bosnia and Herzegovina
132 120 123 122 112 106 107 104 86  Uganda
133 118 99 105 99 103 123 108 97  Yemen
134 132 132 134 133 132 120 124 116  India
135 139 130 130 138 133 133 127 117  Ecuador
136 136 143 138 130 128 119 105 91  Lesotho
137 133 138 147 145 139 150 141 123  Cambodia
138 135 131 135 139 137 132 121 103  Palestine
139 146 139 126 135 140 139 147 129  Mozambique
140 159 169 181 176 177 174 168 146  Burundi
141 148 142 142 126 124 122 117 111  Bhutan
142 140 141 143 148 156 163 157 134  Sierra Leone
143 141 147 139 152 164 156 156 ..  Tajikistan
144 149 151 155 149 159 167 .. ..  Liberia
145 134 127 128 131 126 124 112 110  Tanzania
146 154 166 150 150 146 140 144 127  Uzbekistan
147 131 133 137 125 121 114 106 106  Nigeria
148 142 137 140 134 144 151 152 133  Madagascar
149 143 135 154 154 149 142 142 128  Sudan
150 147 149 146 140 135 128 118 ..  Gambia
151 165 164 166 153 150 146 135 120  Iraq
152 145 144 129 137 142 138 128 112  Iran
153 152 148 136 136 134 130 123 109  Algeria
154 153 150 151 147 155 164 161 152  Burkina Faso
155 151 146 153 156 162 160 159 148  Mali
156 150 140 141 127 125 121 119 108  F.S. Micronesia
157 156 162 160 165 166 159 148 138  Togo
158 158 157 159 162 153 152 139 ..  Comoros
159 .. .. .. .. .. .. .. ..  Laos
160 171 170 158 163 157 153 158 ..  Djibouti
161 164 158 161 155 148 141 134 ..  Suriname
162 155 153 149 161 158 147 137 118  Bolivia
163 170 156 156 158 151 143 136 ..  Gabon
164 168 160 167 160 168 161 151 135  Afghanistan
165 144 134 144 143 138 145 130 125  Syria
166 162 155 164 170 169 165 150 ..  Equatorial Guinea
167 177 167 169 168 163 155 149 145  Ivory Coast
168 161 161 168 171 167 158 154 139  Cameroon
169 160 163 178 180 180 177 170 147  São Tomé and Príncipe
170 172 171 157 159 160 154 140 122  Zimbabwe
171 157 145 133 132 131 131 125 104  Malawi
172 169 168 174 164 173 170 174 143  Timor-Leste
173 167 159 165 166 161 166 162 140  Mauritania
174 175 175 170 172 172 157 153 136  Benin
175 178 179 179 173 171 172 167 137  Guinea
176 176 173 173 174 174 171 165 153  Niger
177 174 174 162 151 154 149 146 131  Haiti
178 166 154 152 157 152 168 160 151  Senegal
179 172 172 163 169 170 169 166 144  Angola
180 179 176 176 181 181 179 171 ..  Guinea-Bissau
181 180 177 172 177 178 175 163 130  Venezuela
182 .. .. .. .. .. .. .. ..  Myanmar
183 181 178 175 182 182 181 175 155  Democratic Republic of the Congo
184 182 180 180 175 175 173 164 141  Eritrea
185 183 181 177 179 179 178 172 150  Congo
186 .. .. .. .. .. .. .. ..  South Sudan
187 .. .. .. .. .. .. .. ..  Libya
188 .. .. .. .. .. .. .. ..  Central African Republic
189 184 183 183 178 176 176 169 149  Chad

Note: Rankings at time of annual report publication. Rankings are subject to revision.

See also[edit]

References[edit]

  1. ^ "Doing Business - Measuring Business Regulations - World Bank Group". Doing Business. 2011-12-30. Retrieved 2013-05-20. 
  2. ^ "Doing Business report series – World Bank Group". Doingbusiness.org. Retrieved 2013-05-20. 
  3. ^ Ease of doing business, Page 111.
  4. ^ "Doing Business and related research - World Bank Group". Doingbusiness.org. Retrieved 2013-05-20. 
  5. ^ a b "Be careful when Doing Business" (PDF). Archived from the original on 2011-07-26. Retrieved 2012-06-27. 
  6. ^ "ITUC-CSI-IGB – International Trade Union Confederation". Ituc-csi.org. 2006-12-14. Retrieved 2012-06-27. 
  7. ^ Tamara Gausi (21 May 2014). New Global Index Elevates Workers' Rights over "Doing Business". Equal Times. Retrieved 30 May 2014; see also: ITUC Global Rights Index: The world's worst countries for workers.
  8. ^ "Doing Business – Doing Business: An Independent Evaluation". Web.worldbank.org. 2008-06-26. Retrieved 2012-02-14. 
  9. ^ "EWI Revisions". Doingbusiness.org. Retrieved 2012-06-27. 
  10. ^ "World Bank Doing Business Project and the statistical methods based on ranks: the paradox of the time indicator.". Rivista italiana di economia demografia e statistica, 2014, Volume LXVIII, Issue 1, ideas.repec.org. Retrieved 2014-07-13. 
  11. ^ "Economy rankings". Doingbusiness.org. 2012-10-23. Retrieved 2012-10-23. 
  12. ^ "Singapore Tops World Bank Survey". Bloomberg. Retrieved 23 August 2011. 

External links[edit]