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14 DOING BUSINESS 2014 FIGURE 1.12 Strong convergence across economies since 2005 Averages by group Time to start a business (days) 120 100 80 Time to pay taxes (hours per year) 800 700 Worst quartile 600 500 Worst quartile 60 400 40 Best 3 quartiles 300 200 Best 3 quartiles 20 100 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2005 2006 2007 2008 2009 2010 2011 2012 2013 Time to deal with construction permits (days) Time to register property (days) 400 250 350 Worst quartile 300 200 Worst quartile 250 150 200 Best 3 quartiles 150 100 100 Best 3 quartiles 50 50 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2005 2006 2007 2008 2009 2010 2011 2012 2013 Time to export (days) 60 Time to import (days) 70 50 40 30 20 Best 3 quartiles Worst quartile 60 50 40 30 20 Best 3 quartiles Worst quartile 10 10 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2005 2006 2007 2008 2009 2010 2011 2012 2013 Cost to start a business (% of income per capita) 350 300 250 200 150 100 50 0 Best 3 quartiles Worst quartile Cost to register property (% of property value) 16 14 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2005 2006 2007 2008 2009 2010 2011 2012 2013 12 10 8 6 4 2 Best 3 quartiles Worst quartile Note: Economies are ranked in quartiles by performance in 2005 on the indicator shown. The data refer to the 174 economies included in Doing Business 2006 (2005). Fifteen economies were added in subsequent years. Source: Doing Business database.
OVERVIEW 15 of regulatory processes. These trends are wholly in keeping with the World Bank Group’s mandate of helping to narrow the differences between high- and uppermiddle-income economies at relatively advanced stages of development and low- or lower-middle-income economies facing more adverse circumstances. Accelerating this convergence is at the heart of effective development policies, and the improvements in performance on Doing Business indicators by economies around the world are an encouraging sign. A similar convergence can be seen when the data are aggregated by region. While OECD high-income economies continue to have the strongest legal institutions and the least complex and costly regulatory processes on average, Europe and Central Asia has been narrowing the gap with their performance, more so than any other region. To a great extent this reflects efforts by the 8 economies joining the European Union in 2004, which have largely continued on a path of comprehensive and ambitious economic and institutional reforms. In the period leading up to EU entry the incentive was to meet the entry criteria. But after 2004 the emphasis shifted to ensuring that they could compete with their more developed high-income partners. Thus in 2012, for example, Poland was the economy that had narrowed the gap with the regulatory frontier the most over the previous year, among all 185 economies ranked. This suggests that the economic integration in the European Union over the past decade has been an effective mechanism in promoting convergence. Indeed, Poland is now classified as a high-income economy, a remarkable achievement over 2 decades. Every region has a leading champion in the scope of improvements made since 2005—whether Poland for OECD high-income economies, China for East Asia and the Pacific or Colombia for Latin America and the Caribbean. And this year a small country in Sub-Saharan Africa, Rwanda, overtook another small country—Georgia, in Europe and Central Asia—as the economy advancing furthest toward the regulatory frontier since 2005 (table 1.4). DO DOING BUSINESS REFORMS GO HAND IN HAND WITH OTHER REFORMS? Since its inception in 2003 Doing Business has recorded more than 2,100 regulatory reforms making it easier to do business, about 25% of which have been inspired or informed by the report and the associated database. 6 Most economies that undertake regulatory reforms as recorded by Doing Business do so as part of a broader reform agenda. Data show that governments investing resources in Doing Business reforms in the past decade have also introduced many policy changes in other important areas. One such area is governance. Data show that improvements in the areas measured by Doing Business are positively correlated with changes in general regulatory quality, a key element of the overall quality of governance. This suggests that economies reforming in areas tracked by Doing Business are likely to be reforming regulation more broadly, not just business regulation. There is also a positive association between improvements in Doing Business indicators and improvements in rule of law and control of corruption. This result is confirmed using other data sources as well. Economies that have improved their performance on Doing Business indicators have also improved their performance on governance measures such as those published by Transparency International, Freedom House and the World Bank, in its Country Policy and Institutional Assessments (CPIA) (figure 1.13). 7 Another such area is health and education. Economies that implement reforms in areas measured by Doing Business also improve health and education at least as fast on average as economies not focusing on such reforms (figure 1.14). This relationship is assessed using the Human Development Index and its components on health and education. 8 The result suggests that a focus on improving the quality of the regulatory framework underpinning private sector activity need not imply a simultaneous lack of attention to improvements in health and education. The cost to amend a company or secured transactions law, or to create a onestop shop for company incorporation, is insignificant compared with the cost to build a hospital or university. There is no evidence to support the view that progress in one policy area necessarily preempts progress in others. In addition, many economies implementing reforms in areas measured by Doing Business are also putting in place measures to improve gender equality. Among the 42 economies identified by Women, Business and the Law as having moved their laws and regulations toward greater gender equality over the past 2 years, 65% also reformed in areas tracked by Doing Business during the same period. WHAT IS IN THIS YEAR’S REPORT? This year’s report presents for the first time a separate chapter about research on the effects of business regulations. There is a rapidly growing body of empirical research examining the impact of improvements in many of the regulatory areas tracked by the Doing Business indicators, and this chapter provides a useful—and encouraging—synthesis. This year’s report also presents an expanded data set. It includes 189 economies, featuring for the first time data for Libya, Myanmar, San Marino and South Sudan. Like previous reports, this year’s report includes case studies. These focus on good practices in 6 of the areas measured by Doing Business indicator sets, with a particular focus on e-government and online government services. The case studies look at the role of minimum capital requirements in starting a business; risk-based inspections in dealing with construction permits; the cost structure in getting electricity; singlewindow systems in trading across borders; e-filing and e-payment in paying taxes; and e-courts in enforcing contracts. In choosing case studies and describing attempts in different parts of the world to implement better practices, the report has attempted to illustrate experiences and highlight processes with broad relevance for governments considering similar reforms. There are potentially useful
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Page 7: Preface A thriving private sector
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Data notes The indicators presented
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Acknowledgments Doing Business woul
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