Business Removing

MEASURING WITH IMPACT 15
What is new?
Three new sets of indicators have been developed, showing
the regulations an entrepreneur faces when registering
property, protecting investors and dealing with business
licenses. The data for the first 2 sets are presented in
this report. Information on business licenses has been so
difficult to collect in some countries that the data will
become available on the Doing Business website in November.
The following indicators are constructed:
• Registering property—procedures, time and cost to
register property. The indicators are constructed
assuming a standardized case of a business that wants to
purchase land and buildings in the peri-urban area of
the most populous city. The property is already recorded
in the registry and cadastre, free of title dispute and valued
at 50 times income per capita. The indicators measure
the time and cost to comply with all necessary procedures
to register the transfer of title from the seller to
the buyer.
• Protecting investors—an index of ownership and financial
disclosure. Seven types of disclosure make up the
indicator—by reporting family, indirect and beneficial
ownership, and on voting agreements between shareholders,
by requiring audit committees and the use of
external auditors and by making such information available
to all current and potential investors. The data come
from a survey of corporate and securities lawyers. They
measure the highest available disclosure, reflecting the
choices of small investors to put their money in publicly
listed or privately held companies. In countries where
stock exchange regulations and securities laws are in
force, the disclosure index assesses these regulations. In
other countries, the disclosure requirements come from
the company law. So the indicators are relevant for private
companies as well as publicly listed ones.
• Dealing with business licenses—procedures, time
and cost to obtain business licenses and permits for ongoing
operations. Because licenses are industry-specific,
the data are built for a case in the construction industry.
In future years the data will cover other major industries.
The same standardized case used in building the starting
a business data is applied to assess the procedures, time
and cost necessary for the business to operate legally in
the construction industry, after completing all required
general registration procedures. Next, a new standardized
case is developed to measure the formalities necessary
for ongoing operations in the construction industry—assuming
that the operations are to build a
warehouse in the peri-urban area of the most populous
city. Technical characteristics of the warehouse are described
to construction and real estate lawyers and construction
associations who answered the survey. Indicators
measure the procedures, time and cost to comply
with all necessary regulations and formalities to complete
the warehouse construction—from obtaining a location
permit or building permit to obtaining utility
connections and registering the new building.
Detailed explanations on the construction of indicators,
including the new ones, are available in the Data
Notes section.
Notes
1. Several papers are already published, including Djankov and others
(2002), Djankov and others (2003a), Djankov and others (2003b), and
Botero and others (forthcoming). Two other papers—Djankov,
McLiesh and Shleifer (2004) and Djankov and others (forthcoming)—
are the basis for the Getting Credit and Closing a Business chapters, respectively.
2. These include, among others, Rajan and Zingales (2003), Klapper,
Laeven and Rajan (2004), Bolaky and Freund (2004), Lerner and
Schoar (2004), Acemoglu (2003), Mulligan and Shleifer (2003), Hoekman,
Kee and Olarreaga (2003) and Smarzynska and Spatareanu
(2004).
3. In the surveys, respondents are asked whether they wish to have their
names and contacts printed. A small percentage have requested
anonymity.
4. Booz, Allen and Hamilton (2004).
5. Questions about the methodology can be asked at http://rru.worldbank.
org/doingbusiness/askquestion and will be answered within 48
hours. Readers who wish to contest the data are referred to the detailed
methodology in the Data Notes or at
http://rru.worldbank.org/doingbusiness/ methodology and to the procedure
by procedure data on the Doing Business website. For example,
in contesting the Starting a Business data on Albania, the reader
should look at http://rru.doingbusiness.org/
doingbusiness/exploretopics/startingbusiness/economies/albania.pdf.
6. SEBRAE (2000), World Bank Investment Climate Assessments, available
at http://www.worldbank.org/privatesector/ic/ic_country_report.htm.