WBG: Doing Business

Doing Business DatabaseThe World Bank Group

Since 2004 Doing Business has been tracking regulatory reforms aimed at improving the ease of doing business. Despite the challenges presented by the financial crisis, the number of reforms hit a record level this year. Between June 2008 and May 2009, 287 reforms were recorded in 131 economies, 20% more than the year before. Reformers focused on making it easier to start and operate a business, strengthening property rights and improving the efficiency of commercial dispute resolution and bankruptcy procedures.

Two regions were particularly active this year: Eastern Europe and Central Asia and the Middle East and North Africa. In Eastern Europe and Central Asia, 26 of the region’s 27 economies reformed business regulation in at least one area covered by Doing Business. Governments in the Middle East and North Africa are reforming at a similar rate, with 17 of 19 reforming in 2008/09. In both cases, competition among neighbors helped inspire widespread reform.

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Singapore, a consistent reformer, is the top-ranked economy on the ease of doing business for the fourth year in a row, with New Zealand as runner-up. But most of the action occurred in developing economies. Two-thirds of the reforms recorded in the report were in low- and lower-middle-income economies. For the first time a Sub-Saharan African economy, Rwanda, is the world’s top reformer of business regulation, making it easier to start businesses, register property, protect investors, trade across borders, and access credit.

Doing Business ranks economies based on 10 indicators of business regulation that record the time and cost to meet government requirements in starting and operating a business, trading across borders, paying taxes, and closing a business. The rankings do not reflect such areas as macroeconomic policy, security, labor skills of the population or the strength of the financial system or financial market regulations.

Once again the most popular reform measure fell in the category of starting a business, with three-quarters of economies making it easier to start a business. Paying taxes was the next most popular category. The financial crisis has also prompted governments to act in areas where regulatory reform may be more difficult and require more time. During the past year 18 economies reformed their bankruptcy regimes, including several economies in the hard-hit region of Eastern Europe and Central Asia. In times of recession, keeping viable companies operating as a going concern and preserving jobs becomes especially important.

Starting a business
Note: Not all indicators are covered for the full period. Registering property was introduced in Doing Business 2005, and paying taxes, trading across borders, dealing with construction permits and protecting investors in Doing Business 2006.

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