Doing Business in 2007: How to Reform

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Judging by the number of reforms in the latest Doing Business report, the publication of standardized indicators inspires healthy competition at the national, regional, and global levels. The report pinpoints some 213 specific reforms in over 100 economies over the past year – compared to 185 reforms in the previous year. Some countries are setting targets for rankings in the future to spur reform momentum. The most popular reforms in 2005/06 were making business start-up easier and simplifying tax regulations. Less progress was made on labor regulations - a determinant of job creation in the formal sector, particularly for women, youth and the poor. Labor rigidity leads to unemployment in rich countries and informality in developing countries, yet only 8 countries improved their labor laws. Other findings from this year’s report include: Africa ranks third on the pace of reform among regions. Two-thirds of African countries made at least one reform, and Tanzania and Ghana rank among the top 10 reformers. In the past 3 years, nearly 85% of reforms took place in the first 15 months of a new government. Georgia was the top reformer in the world, improving in 6 of the 10 areas studied by Doing Business. Discussion Questions Of the 10 topics in the Doing Business report, where do you think reforms can most significantly improve the investment climate? A country's ranking in the Doing Business report has become a well-known indicator. Are countries beginning to "game" the ranking by reforming only those areas of business regulation covered by the report’s methodology? What are good reform strategies for administrations which have left the "reform window" of the first 15 months? Have you read earlier Doing Business reports and how would you evaluate this one in comparison to the others? The next report may address topics like the quality of business infrastructure and the cost of corruption. With this addition to the indicators, what research questions would you like to see in future Doing Business reports?