Doing Business 2009 - Five years of reforms

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Doing Business 2009 is here! The sixth in the World Bank Group's annual series on business regulations, DB 2009 allows us to take a look at five years of reforms since DB 2004. But before I get to that, let me hit the highlights of DB 2009:

  • This year's top reformer is...drum roll please...Azerbaijan! Azerbaijan improved on 7 out of 10 of the indicators tracked by DB and moved up 64 slots in the overall rankings.
  • Two regions - Eastern Europe and Central Asia and Sub-Saharan Africa - accounted for 7 of the top 10 reformers: Azerbaijan, Albania, Kyrgyz Republic, Belarus, Senegal, Burkina Faso, and Botswana. The other top 10 were Columbia, Egypt, and Dominican Republic.
  • Once again, Singapore tops the rankings, followed by New Zealand, the United States, and Hong Kong, China. 

While the rankings always hog a lot of the media attention, I think the more interesting thing about this year's report is that it lets us get a feel for overall reform trends. As DB 2009 points out, many reforms don't happen overnight; they require a longer-term commitment. So what do the overall trends look like?

Since 2004, nearly 1,000 reforms have been carried out with an impact on the 10 indicators tracked by DB. For the fifth year in a row, Eastern Europe and Central Asia has led the world in Doing Business reforms - the region accounts for a third of all reforms observed since Doing Business 2004. In 2007 Eastern Europe and Central Asia surpassed East Asia and Pacific in the average ease of doing business and has maintained its place this year. Around the world, more regulatory reforms were recorded between June 2007 and June 2008 than in any previous year - 113 economies implemented 239 reforms.

Also not to be ignored this year is Sub-Saharan Africa. Often seen as the development laggard, this region is definitely looking up in terms of its business regulatory environment. The graph below demonstrates the general upward trend in the annual number of reforms since DB 2005:


The overview in DB 2009 had this to say about reforms in the region: "This focus on reform comes after several years of record economic growth in Africa. Annual growth has averaged nearly 6% in the past decade, thanks to better macroeconomic conditions and greater peace on the continent. With more economic opportunities, regulatory constraints on businesses have become more pressing. Governments increasingly focus on reducing these constraints." As they say, though, the proof is in the pudding. What's the relationship between business regulatory reform and the ease of doing business?

The report points to a number of examples of observed payoffs:

  • Six months after Egypt reformed its property registry, title registration increased and revenue rose by nearly 40%.
  • After reductions in minimum capital requirements, new company registration increased by 55% in Georgia and 81% in Saudi Arabia.
  • Research also suggests that reforms in Mexico have had a positive payoff: the number of registered businesses rose by 6%,  employment increased by 2.6%, and prices fell by 1% due to competition from new entrants.
  • There is now a large and growing body of research on this topic - here is a bibliography.

One last thing - Doing Business entered the world of social networking not too long ago. Check out our new page on Facebook!

Cross-posted on the DB blog.


Ryan Hahn

Operations Officer

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