Keeping track of regulatory reforms: Doing Business 2009

The International Finance Corporation (IFC) and the World Bank recently published Doing Business 2009, an annual report that ranks 181 economies on the overall ease of doing business.

According to the report, more regulatory reforms were recorded worldwide between June 2007 and June 2008 than in any previous year: 239 reforms in 113 economies. Reformers simplified business regulations, strengthened property rights, eased tax burdens, increased access to credit and reduced the cost of exporting and importing. The pace of reform varied across regions, with Eastern Europe and Central Asia reforming the most. In terms of countries, Singapore tops the rankings, followed by New Zealand, the United States, and Hong Kong, China.

With regard to Latin America, the geographic focus area of the WBCSD-SNV Alliance for Inclusive Business, Colombia and El Salvador stand out as key examples of regulatory reform. According to Sylvia Solf, lead author of the report, “the region’s most popular area for regulatory reform continues to be facilitating trade, followed by changes that make it easier to start a business.”

Out of the 9 countries in which the Alliance is active, Chile is again the most business-friendly ranked 40^th out of 181 economies. It is followed by Colombia (55^th), Peru (62^nd), El Salvador (72^nd), Panama (81^st), Nicaragua (107^th), Honduras (133^rd), Ecuador (136^th), and Bolivia (150^th).

The rankings are based on 10 indicators of business regulation that track 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, quality of infrastructure, currency volatility, investor perceptions, or crime rates.

The Doing Business database is based on the efforts of more than 6,700 local experts—business consultants, lawyers, accountants, and government officials—and leading academics around the world who provided methodological support and review.

More information: 

• The fact that the World Bank ranks countries on the quality of their regulatory environment has been criticized for focusing too narrowly on encouraging countries to scrap red tape. In a recent report, the bank’s Independent Evaluation Group said the indicators painted only a partial picture of the factors affecting a country’s investment climate.
• See our article on last year’s rankings - “Doing Business in 2008” report: Latin America fares poorly in terms of regulatory reforms