Ease of doing business index

The ease of doing business index is an index created by the World Bank Group.^[1] Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights. Empirical research funded by the World Bank to justify their work show that the effect of improving these regulations on economic growth is strong.^[2]

"Empirical research is needed to establish the optimal level of business regulation—for example, what the duration of court procedures should be and what the optimal degree of social protection is. The indicators compiled in the Doing Business project allow such research to take place. Since the start of the project in November 2001, more than 800 academic papers have used one or more indicators constructed in Doing Business and the related background papers by its authors."^[3]

Methodology

The index is based on the study of laws and regulations, with the input and verification by more than 9,600 government officials, lawyers, business consultants, accountants and other professionals in 185 economies who routinely advise on or administer legal and regulatory requirements.

The ease of doing business index is meant to measure regulations directly affecting businesses and does not directly measure more general conditions such as a nation's proximity to large markets, quality of infrastructure, inflation, or crime. A nation's ranking on the index is based on the average of 10 subindices:

• Starting a business – Procedures, time, cost and minimum capital to open a new business
• Dealing with construction permits – Procedures, time and cost to build a warehouse
• Getting electricity – procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse
• Registering property – Procedures, time and cost to register commercial real estate
• Getting credit – Strength of legal rights index, depth of credit information index
• Protecting investors – Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
• Paying taxes – Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of gross profit
• Trading across borders – Number of documents, cost and time necessary to export and import
• Enforcing contracts – Procedures, time and cost to enforce a debt contract
• Resolving insolvency – The time, cost and recovery rate (%) under bankruptcy proceeding

The Doing Business project also offers information on following datasets:

• Distance to frontier - Shows the distance of each economy to the “frontier,” which represents the highest performance observed on each of the indicators across all economies included in Doing Business since each indicator was included in Doing Business
• Entrepreneurship - Measures entrepreneurial activity. The data is collected directly from 130 company registrars on the number of newly registered firms over the past seven years
• Good practices - Provide insights into how governments have improved the regulatory environment in the past in the areas measured by Doing Business
• Transparency in business regulation - Data on the accessibility of regulatory information measures how easy it is to access fee schedules for 4 regulatory processes in the largest business city of an economy

For example, according to the Doing Business (DB) 2013 report, Canada ranked third on the first subindex "Starting a business" behind only New Zealand and Australia. In Canada there is 1 procedure required to start a business which takes on average 5 days to complete. The official cost is 0.4% of the gross national income per capita. There is no minimum capital requirement. By contrast, in Chad which ranked among the worst (181st out of 185) on this same subindex, there are 9 procedures required to start a business taking 62 days to complete. The official cost is 202% of the gross national income per capita. A minimum capital investment of 289.4% of the gross national income per capita is required.

While fewer and simpler regulations often imply higher rankings, this is not always the case. Protecting the rights of creditors and investors, as well as establishing or upgrading property and credit registries, may mean that more regulation is needed.

Research and influence

More than 800 academic papers have used data from the index.^[4] The effect of improving regulations on economic growth is claimed to be very strong. Moving from the worst one-fourth of nations to the best one-fourth implies a 2.3 percentage point increase in annual growth.

The various sub-components of the index in themselves provide concrete suggestions for improvement. Many of them may be relatively easy to implement and uncontroversial (except perhaps among corrupt officials who may gain from onerous regulations requiring bribes to bypass). As such, the index has influenced many nations to improve their regulations. Several have explicitly targeted to reach a minimum position on the index, for example the top 25 list.

Somewhat similar annual reports are the Indices of Economic Freedom and the Global Competitiveness Report. They, especially the later, look at many more factors that affect economic growth, like inflation and infrastructure. These factors may however be more subjective and diffuse since many are measured using surveys and they may be more difficult to change quickly compared to regulations.

According to some critics, however, some of the research lacks the rigor of a coherent economic theory, contains unstated ideological biases, and too much of it is undertaken by individuals closely associated with the index and reforms, so it is not sufficiently independent to be fully credible.^[5]

Doing business 2013

Doing Business 2013 covers regulations measured from June 2011 through May 2012. The report marks the 10th edition of the Doing Business series. Over the past decade, these reports have recorded nearly 2,000 regulatory reforms implemented by 180 economies.

• Poland was the global top improver in the past year. It enhanced the ease of doing business through four institutional or regulatory reforms, making it easier to register property, pay taxes, enforce contracts, and resolve insolvency.
• Besides Poland, nine other economies are recognized as having the most improved ease of doing business across several areas of regulation as measured by the report: Sri Lanka, Ukraine, Uzbekistan, Burundi, Costa Rica, Mongolia, Greece, Serbia, and Kazakhstan.
• Worldwide, 108 economies implemented 201 regulatory reforms in 2011/12 making it easier to do business as measured by Doing Business. Reform efforts globally have focused on making it easier to start a new business, increasing the efficiency of tax administration and facilitating trade across international borders. Of the 201 regulatory reforms recorded in the past year, 44% focused on these 3 policy areas alone. Read about reforms.
• Singapore topped the global ranking on the ease of doing business for the seventh consecutive year, followed by Hong Kong SAR; New Zealand; the United States; and Denmark. Georgia was a new entrant to the top 10. View the rankings.

Doing business 2014

Doing Business 2014 covers regulations measured from June 2012 through May 2013 in 189 economies. The report marks the 11th edition of the Doing Business series.

• Singapore is the first economy of the global ranking followed by Hong Kong SAR, New Zealand, the United States, Denmark, Malaysia, South Korea, Georgia, Norway, and the United Kingdom.
• For the first time data about Libya, Myanmar, San Marino, and South Sudan were collected.
• 114 economies adopted 238 regulatory reforms in 2012/13 (the reforms increased of 18% compared to the previous year).
• 9 of the 20 economies that reduced the distance with the regulatory frontier the most (since 2009s) are located in Sub-Saharan Africa.

Doing business 2015

Doing Business 2015 covers regulations measured from June 2013 through June 2014 in 189 economies. The report marks the 12th edition of the Doing Business series.^[6]

• For the first time this year, Doing Business collected data for 2 cities in 11 economies with more than 100 million inhabitants. The economies are: Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation, and the United States. The added city enables a subnational comparison and benchmarking against other large cities. Differences between cities are more common in indicators measuring the steps, time and cost to complete a standardized transaction where local agencies play a larger role, finds the report.
• Some major developed countries have seen a major inclines this year, including countries such as Brazil, Canada, France, Italy, The United Kingdom and The United States .

Criticism

The Doing Business methodology regarding labor regulations was criticized by the International Trade Union Confederation because it favored flexible employment regulations.^[7] In early reports, the easier it was to dismiss a worker for economic reasons in a country, the more its rankings improved. The Employing Workers index was revised in Doing Business 2008 to be in full compliance with the 188 International Labour Organization conventions. It has subsequently been removed from the rankings. The ITUC debuted the Global Rights Index in 2014 as a response to the Doing Business report.^[8]

In 2008 the World Bank Group's Independent Evaluation Group, a semi-independent watchdog within the World Bank Group, published an evaluation of the Doing Business index.^[9] The report, Doing Business: An Independent Evaluation, contained both praise and criticism of Doing Business. The report recommended that Doing Business be clearer about what is and is not measured, disclose changes to published data, recruit more informants, and simplify the Paying Taxes indicator.

In April 2009 the World Bank issued a note with revisions to the Employing Workers index.^[10] The note explained that scoring for the Employing Workers indicator would be updated in Doing Business 2010 to give favorable scores for complying with relevant ILO conventions. The Employing Workers indicator was also removed as a guidepost for Country Policy and Institutional Assessments, which help determine resources provided to IDA countries.

A study commissioned by the Norwegian government alleges methodological weaknesses, an uncertainty in the ability of the indicators to capture the underlying business climate, and a general worry that many countries may find it easier to change their ranking in Doing Business than to change the underlying business environment.^[5]

In June 2013, an independent panel appointed by the President of the World Bank and headed by Trevor Manuel of South Africa, issued a review expressing concern about the potential for the report and index to be misinterpreted, the narrowness of the indicators and information base, the data collection methodology, and the lack of peer review. It recommended that the report be retained, but that the aggregate rankings be removed and that a peer-review process be implemented (among other things). Regarding the topics of Paying Taxes and Employing Workers, it noted that "The latter has already been excluded from the report's rankings. While there is a persuasive case for paying attention to these aspects of doing business, the Bank will need to carefully consider the correct way to assess the regulation and legal environment of these areas if these indicators are to be retained."

The Doing Business criteria for measuring the time needed to complete a procedure were based on some simplified assumptions: "It is assumed that the minimum time required for each procedure is 1 day. Although procedures may take place simultaneously, they cannot start on the same day (that is, simultaneous procedures start on consecutive days)". These assumptions generated some criticisms especially by countries that were able to complete one or more procedures simultaneously and could therefore be penalized in the final rank. World Bank claimed that the same criteria are applied to all economies and therefore would not produce biased results. In 2014 the possible biases in applying the DB time indicator were mathematically demonstrated in a scientific article^[11] appeared on the Rivista italiana di economia demografia e statistica (Italian Review of Economics, Demography and Statistics - RIEDS). World Bank partially reviewed the criteria inserting a new assumption for telematics procedures: "each telematics procedure accounts for 0.5 day instead of one day (and telematics procedures can also take place simultaneously)".

Ranking

The most recent rankings come from the "Doing Business 2016" report.^[12] Ranking of economies was introduced in the "Doing Business 2006" report.

Singapore has topped the Ease of Doing Business rankings.^[13] Based on Singapore's experience, IDA International is collaborating with public agencies in several countries in the areas such as ICT strategy, national infocomm planning and solutions implementation that can help increase the ease of doing business.

2016	2015	2014	2013	2012	2011	2010	2009	2008	2007	2006	Country/region
1	1	1	1	1	1	1	1	1	1	1	Singapore
2	2	3	3	3	3	3	3	2	2	2	New Zealand
3	4	5	5	5	6	6	5	5	6	6	Denmark
4	5	7	8	8	16	19	23	22	19	20	South Korea
5	3	2	2	2	2	2	2	4	4	4	Hong Kong
6	8	10	7	7	4	5	6	6	5	5	United Kingdom
7	7	4	4	4	5	4	4	3	3	3	United States
8	11	14	13	14	14	18	17	14	14	16	Sweden
9	6	9	6	6	8	10	10	9	9	8	Norway
10	9	12	11	11	13	16	14	13	13	13	Finland
13	10	11	10	15	10	9	9	10	10	10	Australia
19	12	13	14	16	15	14	11	12	12	12	Iceland
17	13	15	15	10	9	7	7	7	8	9	Ireland
15	14	21	20	19	22	25	27	21	17	15	Germany
24	15	8	9	9	12	13	16	20	38	98	Georgia
14	16	19	17	13	7	8	8	8	7	7	Canada
16	17	22	21	24	17	24	22	18	18	18	Estonia
16	18	6	12	18	21	23	21	23	20	17	Malaysia
11	19	16	16	25	33	46	61	58	54	44	Taiwan
26	20	29	28	26	27	21	19	15	15	14	Switzerland
20	24	17	27	27	23	26	25	28	22	22	Lithuania
49	26	18	18	17	19	12	12	19	23	23	Thailand
32	28	20	19	23	20	17	24	29	32	31	Mauritius
31	22	23	26	33	40	33	47	55	59	51	United Arab Emirates
22	23	24	25	21	24	27	29	26	24	28	Latvia
12	30	25	23	22	38	32	69	79	93	83	Macedonia
82	49	26	22	12	11	13	15	25	36	34	Saudi Arabia
34	29	27	24	20	18	15	13	11	11	11	Japan
28	27	28	31	31	30	30	28	27	25	25	Netherlands
21	21	30	29	32	32	28	26	24	21	21	Austria
23	25	31	30	30	31	48	48	43	44	50	Portugal
62	46	32	52	45	58	67	143	148	145	132	Rwanda
29	51	33	35	37	42	53	57	64	52	42	Slovenia
48	41	34	37	39	43	49	40	36	34	29	Chile
53	40	35	38	34	29	29	30	30	26	26	Israel
43	42	36	33	28	25	22	20	16	16	19	Belgium
35	45	37	32	55	48	43	50	41	42	41	Armenia
27	31	38	34	29	26	31	31	31	30	36	France
47	64	39	36	40	37	40	36	..	..	..	Cyprus
57	47	40	41	43	47	35	33	32	27	27	Puerto Rico
73	43	41	39	35	34	34	32	35	31	30	South Africa
50	35	42	43	41	36	56	65	54	51	55	Peru
54	34	43	45	42	39	37	49	67	74	63	Colombia
46	36	44	51	56	66	71	77	80	72	..	Montenegro
25	32	45	55	62	70	72	72	71	64	56	Poland
65	53	46	42	38	28	20	18	17	..	..	Bahrain
37	66	47	47	49	57	65	60	57	50	45	Oman
68	50	48	40	36	50	39	37	38	..	..	Qatar
29	37	49	46	48	41	42	35	37	33	32	Slovakia
41	77	50	49	47	59	63	64	81	76	77	Kazakhstan
74	60	51	50	46	55	69	73	82	78	68	Tunisia
33	33	52	44	44	49	62	51	46	41	38	Spain
38	39	53	48	53	35	51	55	42	40	58	Mexico
42	54	54	54	51	46	47	41	50	46	46	Hungary
69	52	55	61	61	72	77	83	76	70	57	Panama
72	74	56	59	54	52	45	39	53	48	40	Botswana
78	69	57	60	61	71	52	46	40	37	33	Tonga
38	38	58	66	59	51	44	42	44	47	48	Bulgaria
84	101	59	79	83	112	96	94	84	..	..	Brunei
61	59	60	56	50	45	64	53	47	..	..	Luxembourg
96	67	61	57	60	61	57	68	52	45	39	Samoa
88	81	62	60	77	62	54	43	34	29	24	Fiji
44	57	63	58	69	68	58	82	115	122	107	Belarus
77	100	64	53	52	53	36	34	33	28	..	Saint Lucia
45	56	65	73	87	80	78	74	59	58	43	Italy
88	79	66	69	68	97	81	78	70	67	..	Trinidad and Tobago
114	70	67	64	63	67	92	87	83	100	88	Ghana
67	102	68	70	70	44	41	80	100	96	90	Kyrgyzstan
55	55	69	71	71	65	73	63	60	71	60	Turkey
63	80	70	67	66	54	38	38	96	94	84	Azerbaijan
104	89	71	63	57	64	50	44	39	35	..	Antigua and Barbuda
60	61	72	78	100	109	109	100	108	97	87	Greece
37	48	73	72	72	56	55	45	45	49	62	Romania
94	76	74	80	76	60	59	58	68	61	47	Vanuatu
36	44	75	65	64	63	74	66	66	68	59	Czech Republic
72	76	76	86	73	60	56	56	60	52	..	Mongolia
97	77	68	65	88	83	76	72	66	..	..	Dominica
63	78	83	81	90	94	108	92	84	69	..	Moldova
73	79	93	97	101	110	117	116	111	101	..	Guatemala
85	80	74	103	95	111	105	93	79	..	..	Seychelles
93	81	..	..	..	..	..	..	..	..	..	San Marino
103	82	75	75	75	70	62	61	55	..	..	Saint Vincent and the Grenadines
111	83	94	84	76	90	99	101	90	73	..	Zambia
97	84	77	85	77	68	59	51	..	..	..	Bahamas
99	85	81	89	102	105	97	103	101	81	..	Sri Lanka
75	86	98	117	119	113	107	..	..	..	..	Kosovo
71	87	97	94	114	128	130	129	115	102	..	Morocco
82	88	89	90	124	114	109	113	98	92	..	Uruguay
65	89	84	80	84	103	110	105	116	115	..	Croatia
68	90	85	82	82	82	89	136	132	119	..	Albania
106	91	88	..	..	..	..	..	..	..	..	Barbados
51	62	92	112	120	123	120	118	111	107	95	Russia
91	93	86	92	89	88	90	91	83	78	..	Serbia
58	94	90	88	81	75	67	62	57	49	..	Jamaica
116	95	95	79	85	87	71	69	65	54	..	Maldives
90	96	91	91	79	89	86	90	88	89	..	China
87	97	92	74	96	104	96	85	77	65	..	Solomon Islands
88	98	87	78	69	66	54	49	39	35	..	Namibia
78	99	99	98	78	93	91	87	92	75	..	Vietnam
113	100	111	116	120	97	92	88	75	64	..	Palau
121	101	96	95	87	76	70	63	53	..	..	Saint Kitts and Nevis
83	102	110	121	125	121	120	117	120	105	..	Costa Rica
94	103	102	..	..	..	..	..	..	..	..	Malta
86	104	82	67	74	61	52	48	43	37	..	Kuwait
108	105	108	107	116	123	123	112	103	80	..	Nepal
118	106	105	93	99	80	75	65	56	..	..	Belize
126	107	100	73	92	91	88	73	62	..	..	Grenada
95	108	138	136	148	144	141	135	129	113	..	Philippines
92	109	103	102	106	124	122	109	113	100	..	Paraguay
128	110	107	105	83	85	85	74	69	61	..	Pakistan
104	111	115	104	113	108	101	98	91	74	..	Lebanon
83	96	112	137	152	145	142	145	144	138	124	Ukraine
133	113	104	101	103	102	95	89	82	66	..	Papua New Guinea
139	114	101	106	108	98	93	86	81	70	..	Marshall Islands
123	115	114	114	100	101	98	95	86	72	..	Guyana
120	116	130	126	127	129	127	126	114	99	..	Brazil
84	117	116	108	91	86	102	104	109	96	..	Dominican Republic
109	118	113	112	86	84	81	77	73	67	..	El Salvador
117	119	106	96	111	100	104	94	85	76	..	Jordan
114	120	128	129	121	122	129	127	131	114	..	Indonesia
122	121	122	119	132	146	147	137	126	..	..	Cape Verde
134	122	117	115	93	79	79	75	63	53	..	Kiribati
110	123	123	124	118	115	114	99	87	..	..	Swaziland
119	124	119	118	117	117	113	97	89	79	..	Nicaragua
132	125	127	111	104	107	111	110	99	93	..	Ethiopia
124	126	124	113	115	118	112	102	95	85	..	Argentina
104	127	125	128	131	141	136	134	133	121	..	Honduras
112	128	109	110	94	106	116	125	143	126	..	Egypt
136	129	121	109	98	95	84	78	80	71	..	Kenya
173	130	129	122	107	119	115	106	102	82	..	Bangladesh
107	131	126	125	110	116	119	118	110	94	..	Bosnia and Herzegovina
150	132	120	123	122	112	106	107	104	86	..	Uganda
137	133	118	99	105	99	103	123	108	97	..	Yemen
130	134	132	132	134	133	132	120	124	116	..	India
115	135	139	130	130	138	133	133	127	117	..	Ecuador
128	136	136	143	138	130	128	119	105	91	..	Lesotho
135	137	133	138	147	145	139	150	141	123	..	Cambodia
143	138	135	131	135	139	137	132	121	103	..	Palestine
127	139	146	139	126	135	140	139	147	129	..	Mozambique
152	140	159	169	181	176	177	174	168	146	..	Burundi
125	141	148	142	142	126	124	122	117	111	..	Bhutan
140	142	140	141	143	148	156	163	157	134	..	Sierra Leone
166	143	141	147	139	152	164	156	156	..	..	Tajikistan
174	144	149	151	155	149	159	167	..	..	..	Liberia
131	145	134	127	128	131	126	124	112	110	..	Tanzania
141	146	154	166	150	150	146	140	144	127	..	Uzbekistan
170	147	131	133	137	125	121	114	106	106	..	Nigeria
163	148	142	137	140	134	144	151	152	133	..	Madagascar
160	149	143	135	154	154	149	142	142	128	..	Sudan
138	150	147	149	146	140	135	128	118	..	..	Gambia
156	151	165	164	166	153	150	146	135	120	..	Iraq
130	152	145	144	129	137	142	138	128	112	..	Iran
154	153	152	148	136	136	134	130	123	109	..	Algeria
167	154	153	150	151	147	155	164	161	152	..	Burkina Faso
146	155	151	146	153	156	162	160	159	148	..	Mali
145	156	150	140	141	127	125	121	119	108	..	F.S. Micronesia
149	157	156	162	160	165	166	159	148	138	..	Togo
159	158	158	157	159	162	153	152	139	..	..	Comoros
148	159	..	..	..	..	..	..	..	..	..	Laos
155	160	171	170	158	163	157	153	158	..	..	Djibouti
162	161	164	158	161	155	148	141	134	..	..	Suriname
157	162	155	153	149	161	158	147	137	118	..	Bolivia
144	163	170	156	156	158	151	143	136	..	..	Gabon
183	164	168	160	167	160	168	161	151	135	..	Afghanistan
175	165	144	134	144	143	138	145	130	125	..	Syria
165	166	162	155	164	170	169	165	150	..	..	Equatorial Guinea
147	167	177	167	169	168	163	155	149	145	..	Ivory Coast
158	168	161	161	168	171	167	158	154	139	..	Cameroon
153	169	160	163	178	180	180	177	170	147	..	São Tomé and Príncipe
171	170	172	171	157	159	160	154	140	122	..	Zimbabwe
164	171	157	145	133	132	131	131	125	104	..	Malawi
172	172	169	168	174	164	173	170	174	143	..	Timor-Leste
176	173	167	159	165	166	161	166	162	140	..	Mauritania
151	174	175	175	170	172	172	157	153	136	..	Benin
169	175	178	179	179	173	171	172	167	137	..	Guinea
168	176	176	173	173	174	174	171	165	153	..	Niger
180	177	174	174	162	151	154	149	146	131	..	Haiti
161	178	166	154	152	157	152	168	160	151	..	Senegal
181	179	172	172	163	169	170	169	166	144	..	Angola
179	180	179	176	176	181	181	179	171	..	..	Guinea-Bissau
182	181	180	177	172	177	178	175	163	130	..	Venezuela
177	182	..	..	..	..	..	..	..	..	..	Myanmar
184	183	181	178	175	182	182	181	175	155	..	Democratic Republic of the Congo
189	184	182	180	180	175	175	173	164	141	..	Eritrea
178	185	183	181	177	179	179	178	172	150	..	Congo
186	186	..	..	..	..	..	..	..	..	..	South Sudan
188	187	..	..	..	..	..	..	..	..	..	Libya
187	188	..	..	..	..	..	..	..	..	..	Central African Republic
185	189	184	183	183	178	176	176	169	149	..	Chad

Note: Rankings at time of annual report publication. Rankings are subject to revision.

See also

• Index of Economic Freedom

References

External links

• List of Global Development Indexes and Rankings