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Doing Business: An Independent Evaluation

Taking the Measure of the World Bank-IFC Doing Business Indicators.
Institutions matter a great deal for development, and a country’s regulatory institutions are vital for the pace and quality of economic growth. The Doing Business (DB) indicators deal with the part of the regulatory regime that governs the start-up, operation, and growth of businesses. Improvements in the climate for businesses can potentially generate jobs and incomes. DB is built on the premise that these firms are more likely to flourish if they have to abide by fewer, cheaper, and simpler regulations.

By ranking countries on selected dimensions of business regulation, the DB report has attracted considerable attention and has become one of the Bank Group’s flagship knowledge products. And, like any rating exercise, it has also provoked important questions and concerns, both inside and outside of the Bank Group. This evaluation takes an independent look at the relevance, reliability, and usefulness of this innovative exercise.

DB assesses the burden of regulation on firms without aiming to capture the social or economy- wide benefits that regulations yield, such as safety, environmental protection, worker protection, or transparency. DB offers a consistent yardstick for comparing countries on regulation as seen from the firm’s private point of view. But a complete appreciation of the quality of the business climate must also measure the quality of infrastructure, labor skills, competition policies, and other determinants and outcomes of investment and profitability.
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