Ease of doing business index

The ease of doing business index is an index created by the World Bank. 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.

"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."

Methodology

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 subindexes:

• 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 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 per capita. 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

More than 800 academic papers have used data from the index. 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. This blanket criticism is often offered by those with their own ideological bias.

Doing business 2013: smarter regulations for small and medium-size enterprises

Doing Business 2013 cover 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.

Criticism

The Doing Business methodology regarding labor regulations was criticized by the International Trade Union Confederation because it favored flexible employment regulations. 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.

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. 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. 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.

Ranking

The most recent rankings come from the "Doing Business 2013" report.

Singapore topped the ranking on Ease of Doing Business for the sixth year. 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.

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

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

See also

• Index of Economic Freedom