Business Removing

79
Data notes
Economy characteristics
Starting a business
Hiring and firing workers
Registering property
Getting credit
Protecting investors
Enforcing contracts
Closing a business
Ease of doing business
The indicators presented and analyzed in Doing Business
measure government regulation and the protection of property
rights—and their effect on businesses, especially on
small and medium-size domestic firms. First, they document
the degree of regulation, such as the number of procedures to
start a business or register commercial property. Second, they
gauge regulatory outcomes, such as the time and cost to enforce
a contract or go through bankruptcy. Third, the indicators
measure the extent of legal protections of property, for
example in the disclosure of company information to investors
or the scope of assets that can be used as collateral according
to secured transactions laws. The data for all sets of
indicators in Doing Business in 2005 are for January 2004.
Based on research of laws and regulations, with input and
verification from more than 3,000 local government officials,
lawyers, business consultants and other professionals routinely
administering or advising on legal and regulatory requirements,
this methodology offers several advantages. It
uses factual information and allows for multiple interactions
with local respondents, clarifying potential misinterpretations
of questions. It is inexpensive, so data can be collected
in a large sample of economies—135 published in Doing
Business in 2005, with another 10 available on the website.
Because the same standard assumptions are applied in the
data collection, which is transparent and easily replicable,
comparisons and benchmarks are valid across countries. And
the data highlight not only the extent of obstacles, but also
help identify their source, supporting policymakers in designing
reform.
The Doing Business methodology has 3 limitations that
should be considered when interpreting the data. First, in
many cases, the collected data refer to businesses in the country’s
most populous city and may not be representative of
regulatory practices in other parts of the country. Second, the
data often focus on a specific business form—limited liability
company of specified size—and may not be representative
of the regulation on other businesses, for example, sole proprietorships.
Finally, some indicators—such as time—involve
an element of judgment by the expert respondents.
Therefore, if sources indicate different estimates, the time indicators
reported in Doing Business represent the median values
of several responses given under the assumptions of the
case study.
Questions on the methodology may be asked through the
“Ask a Question” function available on the Doing Business
website at http://rru.worldbank.org/doingbusiness and will
be answered within 48 hours. For urgent queries, please call
Marie Delion at 1 202 473 0183. Updated indicators, as well
as any revisions of or corrections to the printed data, are
available on the website.