Data-driven transparency: The need for easy access to laws and regulations for businesses

This is the second blog in a series about Business Ready (B-READY), a World Bank flagship report that assesses the global business environment. The first blog, Data for reforms: Leveraging the B-READY 2024 report for enhanced business environments, offered guidance on how to effectively navigate and leverage B-READY data to enhance business environments.


Transparency is essential for deterring and detecting corruption and building trust. It generally denotes making reliable, complete, and timely information about conditions, decisions, and actions publicly accessible. By doing so, transparency strengthens citizens’ rights, upholds accountability, and fosters economic development, including support for private sector firms. For a thriving entrepreneurial environment, access to information about the business landscape and public agencies’ performance is crucial. For instance, both firms and society benefit from electronic databases containing key company records. Similarly, tax administrations can improve their operations when their financial statements and performance are periodically audited by independent external bodies, with findings made available to taxpayers.

Before implementing specific business-related reforms in this area, it is vital to adopt fundamental practices that are critical across sectors. A key such step for promoting transparency in the private sector is providing firms with easy access to laws and regulations. Since the regulatory framework often includes numerous legal instruments subject to frequent changes, a good practice is to publish laws and regulations in regularly updated, searchable electronic databases. When access is restricted—such as the absence of electronic databases, incomplete publication of laws, or outdated information—businesses may perceive a lack of transparency in the economy, losing their confidence to invest.

While the benefit of providing full access to laws and regulations is easy to understand, it is a striking fact that most economies have not implemented this basic good practice. In particular, as part of the data collection conducted for the recently released Business Ready (B-READY) report, the Dispute Resolution topic specifically focused on this issue in a set of 54 economies featuring all income levels and geographic regions around the world.

In this sample, only 25 economies have created electronic searchable databases that allow businesses and individuals to consult all pieces of legislation free of charge. In 19 economies, there are publicly available databases, but they provide access to main laws and regulations only, which excludes more specific acts of legislation, such as ministerial decrees or municipal bylaws. In the remaining 10 economies, access to the regulatory framework is not provided as such. 
 

Even though the B-READY 2024 dataset provides information on 54 economies, and full global coverage will only be achieved by 2026, some preliminary observations already emerge. The degree of businesses’ access to the regulatory framework tends to decrease along with an economy’s income level. While in 64 percent of high-income economies firms can benefit from full access to legislation, this number drops to 47 percent in upper-middle-income ones, to 39 percent in lower-middle-income economies, and even further to 29 percent in the low-income group.

In both the lower-middle-income and low-income groups, it is common when access is provided to main laws and regulations only. In addition, in almost 30 percent of low-income economies the regulatory framework is not available at all. Our previous research confirmed the existence of a digital divide between the developed and developing economies, and the new evidence suggests that there is also a transparency gap between these two groups.
 

In terms of regional trends, the B-READY data demonstrate that businesses in the sampled economies in Europe & Central Asia (ECA) and East Asia & Pacific (EAP) are more likely to enjoy full access to the regulatory framework compared to the global average. In both regions, all legislation is publicly available in around 60 percent of the economies assessed in B-READY 2024.

The data also shed light on positive efforts to promote regulatory transparency in Latin America & Caribbean (LAC), Middle East & North Africa (MENA), and South Asia (SA): In LAC, 50 percent of the measured economies provide full access to the regulatory framework and another 50 percent grant access only to main laws and regulations; in MENA, these numbers are 40 percent and 40 percent respectively among the sampled economies, while no access is provided in 20 percent of them; in SA, 33 percent of the measured economies allow for easy access to all pieces of legislation, while 67 percent have made available only main laws and regulations. The Sub-Saharan Africa (SSA) region appears to lag behind others because solely in 27 percent of the measured economies investors can enjoy full access to the regulatory framework and in 33 percent of economies laws and regulations are not available altogether.

This preliminary evidence shows that while transparency is a core requirement for a thriving private sector, in many parts of the world businesses hardly can enjoy it. Even when it comes to such basic features as making all pieces of legislation publicly available through electronic searchable databases, the majority of economies covered by B-READY do not provide it yet. While many different reforms are needed to improve transparency conditions across various economies, as a starting point these should include granting firms an easy access to the full spectrum of laws and regulations.

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* The authors are thankful to Sol Chiara Rivas Lopes for great research assistance.