DO I N G BU S I N ESS 20 1 9

1. DOING BUSINESS2019 TrainingforReform TRADING ACROSSBORDERS

2. DOINGBUSINESS2019 Contents iv Foreword 1 Overview 22AboutDoingBusiness Casestudies 33 StartingaBusinessandRegisteringProperty: Theroleoftraininginfacilitatingentrepreneurshipandpropertyrights 39 GettingElectricity: Understandingthebenefitsofwiringregulation 46 TradingAcrossBorders: Trainingfortradefacilitation 53 EnforcingContractsandResolvingInsolvency: Trainingandefficiencyinthejudicialsystem 61Annex:LaborMarketRegulation: TrendsfromDoingBusinessdata 67References 73 DataNotes 126EaseofDoingBusiness ScoreandEaseofDoingBusinessRanking 133 SummariesofDoingBusinessReformsin2017/18 152CountryTables 216 Acknowledgments • DoingBusiness2019isthe16thinaseriesofannual reportsinvestigatingthe regulationsthatenhancebusinessactivityandthosethatconstrainit. • DoingBusinesspresentsquantitative indicatorsonbusiness regulationandtheprotectionofpropertyrights thatcanbecomparedacross190economies—fromAfghanistanto Zimbabwe—andovertime. • Regulationsaffecting11areasofthe lifeofabusinessarecovered:startingabusiness,dealingwithconstruction permits,gettingelectricity, registeringproperty,gettingcredit,protecting • minorityinvestors,payingtaxes,tradingacrossborders,enforcingcontracts,resolvinginsolvencyandlabormarket regulation.Thelabormarket regulationdataarenotincludedinthisyear’srankingontheeaseofdoingbusiness. • DatainDoingBusiness2019arecurrent asofMay1,2018.Theindicatorsare usedtoanalyzeeconomicoutcomes andidentifywhat reformsofbusinessregulationhave worked,whereandwhy.

3. DOINGBUSINESS2019 Foreword 23%ofincomepercapita,comparedto 47daysand76%ofincomepercapitain2006.Evenmoretelling,todaytheaveragepaid-inminimumcapitalthatentrepreneursmustdepositis6%ofincomepercapita, comparedwith145%ofincome per capitain2006.Theglobalaveragetimetoprepare,fileandpaytaxeshasfallenfrom324hoursin2005to237hoursin2017. What getsmeasured getsdone. Overthepast15years,noreporthasillustratedthisaphorismbetterthanDoing Business.Anchoredinrigorousresearchandmethodology,DoingBusinessgathersdetailedandobjectivedataon11areasofbusinessregulation,helpinggovern-mentsdiagnoseissuesinadministrativeproceduresandcorrectthem.Thereportmeasurescomplexregulatorypro-cessesbyzeroinginontheirquantifiable components,whichcanbecontested,compared—overtimeandacrossecono-mies—and,ultimately,reformed. Sub-SaharanAfricahasbeentheregionwiththehighestnumberofreforms eachyear since 2012.Thisyear,DoingBusiness capturedarecord107 reforms across40economiesinSub-SaharanAfrica,andtheregion’sprivatesectorisfeelingtheimpactoftheseimprovements.Theaver-agetimeandcosttoregisterabusiness,forexample,hasdeclinedfrom59daysand192%ofincomepercapitain2006to23daysand40%ofincomepercapitatoday.Furthermore,theaveragepaid-inminimumcapitalhasfallenfrom212%ofincomepercapitato11%ofincomepercapitainthesameperiod. DoingBusinesshasinspiredthousandsofarticlespublishedinpeer-reviewedjour-nalsandcreatedaplatformforinformeddebate about regulatory andinstitutionalframeworksforeconomicdevelopment.ManyDoingBusinessindicatorshavebeenincorporatedintotheindexesofotherinstitutions,whichhasspurredmoredebateabouttheidealbusinessclimatetodriveinclusive,sustainableeconomic growth. Thisyear’s10topimproversincludearangeofeconomies—largeandsmall; richandpoor—fromfiveregions.Thediversityshowsthat,regardless ofbackground,anyeconomycanimprovebusinessregulationwhenthewillofpolicymakers is strong.With13reformsbetweenthem,ChinaandIndia—twooftheworld’slargesteconomies—areamongthe 10 topimprovers.Atthesame Sinceitslaunchin2003,DoingBusiness hasinspiredmorethan3,500reformsinthe10areasofbusinessregulationmeasuredbythereport.Thisyear,weobservedapeakinreformactivityworldwide—128economiesundertookarecord314reformsin2017/18.Aroundtheworld,registeringabusinessnowtakesanaverageof20daysandcosts

4. FOREWORD v entrepreneurshipandathrivingprivatesector. Withoutthem,wehavenochancetoendextremepovertyandboostsharedprosperityaroundtheworld. notnecessarilyfollow.Arankinghelpsputtheinformationinfrontofleadersandmakesithardtoignore.ThereporthelpedinspiretheHumanCapitalIndex(HCI),whichwelaunchedatthe2018AnnualMeetingsinIndonesia.LikeDoing Business,theHCIisbasedontheideathat,regardlessofhowcomplexanareamaybe, with solidresearch andmethodology itcanbemeasured.Thesetypesofdatapromotereform,notonlybecausetheyareeasytoanalyze,traceandacton,butalsobecausetheyincreasetransparencyandaccountability. Governmentshavetheenormoustaskoffosteringanenablingenviron-mentforentrepreneursandsmalland medium-sizeenterprises.Soundandefficientbusinessregulationiscriticalfor timeDjibouti,asmalleconomy,isalsoonthelistwithsixreforms.Andwithatotalof12businessregulatoryreformsbetweenthem,AfghanistanandTurkeyareonthelistof10top improversforthe firsttimeinthereport’shistory. Internationalinstitutionsandresearchcenterscanplayacentralrolebybuild-ingasolidbaseofknowledgeanddatatoinformgovernments,researchersandthegeneralpublic. WithDoingBusiness, theWorldBankGroupisfullycommit-tedtothismission.Thereformsthatthereportinspireswillhelppeoplereachtheiraspirations;drive inclusive,sustain-ableeconomicgrowth;andbringusonestepcloserto ending poverty on the faceoftheearth. Perhapsmostnotably,fourofthe10topimprovers—Afghanistan,Djibouti,Côted’IvoireandTogo—arecountriessufferingfromfragility,conflictandvio-lence.TheWorldBankGroupandotherorganizationshaveworkedcloselywiththeseeconomiestoaddresspressinghumanitariananddevelopmentalneeds,whilealsostrengtheningtheirlegalandeconomicinstitutions. Doing Businesstaughtusthatevenwithcomprehensiveevidence,reformsdo JimYongKim PresidentWorld Bank Group

5. DOINGBUSINESS2019 Overview • DoingBusinesscapturedarecord314 regulatoryreformsbetweenJune2, 2017,andMay1,2018.Worldwide, 128economiesintroducedsubstantial • regulatoryimprovementsmakingiteasiertodobusinessinallareasmeasured byDoingBusiness. Aneconomycannotthrivewithoutahealthyprivatesector.Whenlocalbusinessesflourish,theycreate jobsandgenerate incomethatcanbe spentandinvesteddomestically.Anyrationalgovernment thatcaresabouttheeconomic well-being and advancementofitsconstituency paysspecialattentiontolawsandregulationsaffectinglocalsmallandmedium-size enterprises(SMEs).Effective businessregulationaffordsmicro andsmallfirmstheopportunitytogrow,innovateand,whenapplicable, move fromthe informalto the formalsector of aneconomy.Like its15predecessors,DoingBusiness2019continuestoenableregulatorstoassessandbenchmarktheirdomesticbusinessregulatoryenvironments. • TheeconomieswiththemostnotableimprovementinDoingBusiness2019 are Afghanistan,Djibouti,China,Azerbaijan, India, Togo,Kenya, Côted’Ivoire,TurkeyandRwanda. • One-thirdofallbusinessregulatoryreformsrecordedbyDoingBusiness2019wereinthe economiesofSub-SaharanAfrica.Withatotalof 107reforms,Sub-SaharanAfricaonceagainhasarecordnumberthisyear. minorityinvestors,payingtaxes,engagingininternationaltrade,enforcing contractsandresolvinginsolvency.DoingBusinesscollectsand publishesdataonlabormarketregulationwithafocusontheflexibilityofemploymentregulationaswellasseveralaspectsofjobquality.However,thisregulatoryareadoesnotconstitutepartoftheeaseofdoingbusinessranking(figure1.1).FormoredetailsontheDoingBusinessindicators,seethedatanotesathttp://www.doingbusiness.org. Doing Businessadvocatesforboth regula-toryquality andefficiency. It isimportanttohaveeffectiverulesinplacethatareeasytofollowandunderstand.Torealizeeconomicgains,reducecorruptionandencourageSMEstoflourish,unnecessaryredtapeshouldbeeliminated.However,specificsafeguardsmustbeputinplacetoensurehigh-qualitybusinessregulatoryprocesses;efficiencyalone isnotenoughfor regulationtofunc-tionwell.Whatuseisitwhenonecantransferpropertyinjustafewdaysandatalowcost,butthepropertyregistry containsunreliableinformationwithincompletegeographiccoverage?Doing Businessexposescaseswithevidentdiscrepanciesbetween regulatoryqualityandefficiency,signalingtoregulatorswhatneedstobereformed. • TheBRICeconomies—Brazil,theRussianFederation,IndiaandChina—introducedatotalof21reforms,withgettingelectricityandtradingacrossbordersthemostcommonareasofimprovement. • The 10topeconomiesintheeaseofdoingbusinessrankingsharecommonfeaturesof regulatoryefficiencyandquality,including mandatoryinspectionsduringconstruction,automatedtoolsusedbydistribution utilitiestorestoreserviceduringpower outages,strongsafeguardsavailableto creditorsininsolvencyproceedingsandautomatedspecializedcommercialcourts. Eachofthemeasuredbusinessregula- toryareasisimportanttonascentandexistingentrepreneurs.However,asDoingBusinessdatashow,SMEownersfacedrasticallydifferentrealitiesacrosseconomiesastheysetupandoperatetheirbusinesses.AnentrepreneurinUganda,forexample,willspendnearlyamonthandundertake13procedurestosetupanewcompany.Theentre-preneurwill thenberequiredtomanage • Trainingopportunitiesforserviceprovidersandusersarepositivelyassociatedwith theeaseofdoingbusinessscore.Similarly, • increasedpublic-privatecommunicationon legislativechangesandprocessesaffectingSMEsareassociatedwithmorereforms andbetterperformanceontheDoing Businessindicators. DoingBusiness2019measurestheprocessesforbusinessincorporation,gettingabuildingpermit,obtaininganelectricityconnection,transferringprop- another18interactionswithdifferent erty,gettingaccesstocredit,protecting

6. 2 DOINGBUSINESS2019 WhatismeasuredinDoingBusiness? FIGURE1.1 Gettinga location Startingabusiness Labormarketregulation Dealingwithconstructionpermits Getting electricity Startingabusiness Resolving insolvency Registering property Enforcing contracts Operatinginasecurebusinessenvironment Getting credit Protecting minority investors Accessing finance Payingtaxes Tradingacrossborders Dealingwith day-to-day operations Source:DoingBusinessdatabase. Note:Labormarketregulationisnotincludedintheeaseofdoingbusinessranking. Doing Businessdoesnotclaimtocover alltheareaspertinenttoprivatesectordevelopmentandgrowth.Thereporthasasetofclearlimitations;DoingBusinessdataalonearenotsufficienttoassessthe overallcompetitivenessorforeigninvestmentprospectsofaneconomy.Doing Businessdoesnotassessmarket size,thesoundnessanddepthoffinan- cialmarkets,macroeconomicconditions,foreigninvestment,securityorpoliticalstability.However,theDoingBusinessindi-cators do offerinsightsfor policymakerstoidentifyareasforreformandimprovethelocalbusinessenvironment.Formoreinformationonwhatismeasuredandwhatisnot,seethechapterAboutDoingBusiness. smallandmedium-sizecompaniesandnationalcompetitiveness.Evidencefrom economicliteraturecorroboratestheeconomicrelevanceandimportanceoftheareasmeasuredbyDoingBusiness.In thecaseofthestartingabusinessindi-catorsetalone,morethan300researcharticleshavebeenpublishedinthetop100academicjournalssince2003assessinghowtheregulatoryenviron-mentforentryaffectsawiderangeofeconomicoutcomessuchasproductivity,growth,employmentandinformality. Recentresearchshowsthepositiveeffectsofimprovedbusinessregulation.Fewerproceduresandlowerlevelsofminimumcapital,forexample,areposi- tivelyandsignificantlyassociatedwiththeprocessofstartingabusiness.Whereprocedures aremorecomplexor unclear,thelikelihoodofcorruptionishigher.3Anotherstudydiscussesthebenefitstocompaniesofformalregistration,suchasgreateraccesstonewequipmentandalargerscaleofoperations,whichcanleadtoincreasedcompetitiveness agencies andwait anadditionalfourmonthstoobtainabuildingpermit. Once theconstructionofthewarehouseiscompleted,theentrepreneurwillneedtowaitanothertwomonthsandcashout7,513.6%ofincomepercapitatoobtainaconnectiontotheelectricalgrid.Incontrast,aDanishentrepreneurcanexpecttobeabletoregisteranewbusinessinjust3.5days,completeallrequiredlegalprocedurestobuildaware-housethroughsevenstepsinslightlyovertwomonthsandsecureareliableelectricityconnectionforabout100%oflocalincomepercapita.Differencesinregulatoryandinstitutionalqualitycanaffecthowmanynewbusinessesarecreatedandthedynamismoftheprivatesector,whichgeneratesjobs andeconomicopportunities.InDenmarktheaveragenumberof newlyregistered companiesiseightper1,000workersperyear,whereasinUgandathisfigureislessthanone newcompanyper1,000 workersperyear.1Manyfactorsexplainthisdifference,includingthelevelof WHATARETHEBENEFITSOFIMPROVEDBUSINESSREGULATION? Doing Businessincludes11indicatorsetsthatmeasureaspectsofbusinessregu- andproductivity.4 business regulation.2 lationwhichareimportanttodomestic

7. OVERVIEW 3 reapingthegrowthbenefitsofreform.9Ampleliteratureontheimportanceofpropertyrightsfindsastrong associationbetweeninvestment,accesstofinance,productivityandeconomic growth.10 In thecontextofconstructionpermit-ting,simplicityandtransparencyarekeyinallowingbusinessestoexpandandbuildnewandsafeinfrastruc-ture.Researchshowsthatregulatoryburdensoften posesubstantialobstaclesforinvestors.Discrepanciesamongexistinglaws,forexample,canleadtounnecessaryandevencontradictory compliancerequirements.5Furthermore,lengthyprocessingtimesforrequiredapprovals—asisthecaseinGhana—candrive up costsandspurthe developmentof an informalconstructionsector,wherefalsifiedconstructionpermitsresultinunsafeinfrastructure.6 methodology,includingfirmentryand labormarketregulation,traderegula-tionsandcostandtaxregulations.Doing Business2016alsopresentedanextendedreviewoftheliteraturepublishedin70topacademiclawjournalsfocusingonfoursetsofindicators:enforcingcontracts,gettingcredit(legalrights),protectingminorityinvestorsandresolvinginsol-vency.17Forfurtherresearchinsights,updatedannually,seethechapterAboutDoingBusinessandtheDoingBusinesswebsiteathttp://www.doingbusiness .org/research. AnotherareameasuredbyDoing Businessistheprotectionofminorityinvestors.Greaterprotectionhelpsfostertrustandconfidenceand, inturn,spursgreateraccesstofinanceforentre-preneurs.11Theindicatorsetfocusesonhowpolicymakersmitigatetheriskthatcorporateexecutives,directorsandmajorityshareholderswillusetheirposi- tiontoadvancetheirowninterestsattheexpenseofthecompanyandothershareholders.Clearrules,robustrightsandincreasedtransparencyaresomeoftheregulatoryinstrumentsattheirdisposal.Corporategovernance isakeydeterminantofinvestmentefficiency,12whileshareholders’abilitytosueandholddirectorsaccountableareessentialchecksand balances.13 WHEREISBUSINESSREGULATIONBETTER? Electricityisanecessityforanybusinesstofunctionproperlyandexpand.Itisalsoanimportantelementinthecompetitive-nessandstrengtheningofhumancapitalinaneconomy.Researchdataindicatethathigherelectricitycoststendtohaveanadverseimpactonbusinesses.Aspricesrise,firmsshifttheirfocustolesselectricity-intensiveproductionprocesses,resultinginreducedoutputandproductivity.7Equallyimportantisthereliability ofapowerconnection.RecentresearchfindsthatpoweroutagesanddeficientpowerinfrastructureinSub-SaharanAfricahad a measurablenegativeimpactoneconomicgrowthovertheperiod1995−2007.8 DoingBusinessbenchmarksaspectsofbusinessregulationandpracticeusingspecificcasestudieswithstan-dardizedassumptions.Basedonaneconomy’sperformanceineachofthe11measuredareas,thereport scorestheefficiencyandqualityofthebusinessenvironment.Thisapproachfacilitatesthecomparisonofregula-tionandpracticeacrosseconomiesandallowsforchangestobetrackedovertime.Theeaseofdoingbusinessscore(box1.1)servesasthebasisforrankingeconomiesontheirbusinessenvironment:toobtaintheranking,economiesaresortedbytheirscores.Theeaseofdoingbusinessscoreshowsaneconomy’sabsolutepositiontothebestregulatorypractice,while theeaseofdoingbusinessrankingisanindica-tionofaneconomy’spositionrelativeto thatofothereconomies. Finally,theregulationoflabormarketsiscriticalaspolicymakersworktocreatemoreandbetterjobsfortheircitizens.Labor regulationis alsoanareaofinteresttoresearchersastheystrive toassesstheoptimalbalancebetweenadequateworkerprotectionsandlabormarketefficiency.InIndia,forexample,researchshowsthatwhenfacedwithrestrictivelaborlaws,firmschoosetocircumventsuchlegislationbyhiringworkersindirectlythroughcontrac- tors,especiallyintimesofeconomicuncertainty.14Anotherstudyonforeigninvestmentandtheorganizationofglobalfirmssuggeststhatfirmsconsiderthe strengthofworkerbargainingpowerwhen makingsourcingdecisions.15 DoingBusiness2014presentedasynthesisofthefast-growingliteraturepublishedintop-rankingeconomicjour-nalsusingDoingBusiness dataforanalysisormotivation.16Thechapterreviewsthedifferentestimationmethodsusedineconomicanalysisandsummarizesthe Similarly,clearlydefinedregulationandequalaccesstopropertyrightsareessentialforenablingbusinessestoexpandtheiroperations.Ifgovernmentsdonotputinplaceadequatelandowner-shipprotectionsandleaveinvestorsopentolanddisputesorpropertyseizures,stakeholderswouldbedisinclinedtoputmoneyintolandandpropertydevelop-mentprojects.Arecentstudyexploringwhetherpoliticalinstitutionshaveanimpactontheeffectiveness of economicreformsinpromotinggrowthfindsthatfinancialandtradereformsaremoreeffectiveindevelopingeconomieswithsoundpropertyrights.Thisevidencesuggeststhatsufficientlydeveloped Theeconomiesthatrankhighestintheeaseofdoingbusiness(table1.1)arethosethathaveconsistentlywell-designedbusinessregulationorwhoseregulatoryenvironmentshavethrivedthanks tocomprehensivereformovertheyears.Thetopthreeeconomiesthisyear—NewZealand,Singapore andDenmark—exemplifyabusiness-friendlyenvironment.Meanwhile, Mauritius,whichjoinsthegroupof propertyrightsmaybeapreconditionfor recentresearchbyareaofstudyand

8. 4 DOINGBUSINESS2019 BOX1.1Whatistheeaseofdoingbusinessscore? Thisyear thenameoftheDoingBusinessdistancetofrontierscore has been changedto“ease ofdoingbusinessscore”tobetterreflectthemainideaofthemeasure—ascoreindicatinganeconomy’spositiontothebestregulatorypractice.Nevertheless, the processforcalculating the scoreremains the same.Thescorecombines measures withdifferent unitssuchas time to startacompanyorprocedurestotransferaproperty.Thescorecapturesthegapbetweenaneconomy’scurrentperformanceandameasureof best regulatorypractice set inDoingBusiness2015acrossthe entiresampleofthesame41indicatorsfor 10Doing Businessindicatorsetsusedinpreviousyears.Forexample,accordingto theDoing Businessdatabase,across alleconomiesandovertime,theleasttimeneededtostartabusinessis0.5days,whileintheworst5%ofcasesittakesmorethan100days.Halfadayis,therefore,consideredthebestperformance,while100daysistheworst.Higherscoresshowabsolutebettereaseofdoingbusiness(thebestscoreissetat100),whilelowerscoresshowabsolutepoorereaseofdoingbusiness(theworstperformance issetat0).Thepercentagepointscoresofaneconomyondifferentindicatorscanbeaveragedtogethertoobtainanaggregatescore.Formoredetails,seethechapterontheeaseofdoingbusinessscoreandeaseofdoingbusinessrankingavailableathttp://www.doingbusiness.org. insolvencyproceedings.Courtautoma-tionisprevalent,andjudgmentsareenforcedtwiceas faston average(95.6days)thanintheremainingeconomies(200days).Theseeconomiesalsohave strongdisclosurerequirementsinplacetopreventthemisuseofcorporateassetsbydirectorsforpersonalgain.Mostmandatethat ashareholdermustimmediatelydisclosetransactions—aswellasanyconflictsofinterest—toothershareholders.Todate,noeconomyhasreachedthebestregu- latoryperformanceonallindicators; everyeconomycanprogressfurtherby learningfromtheexperienceofothers. andtheMiddleEastandNorthAfrica.Exceptforlow-incomeeconomies,all incomegroupsarerepresented.Theregionaldiversityandvaryingincomelevelsamongthetop20economiesunderscorethepointthatanyeconomycanmake ittothetop,aslongas ithasfewbureaucratichurdlesandstronglawsandregulation.Theefficiencyandqualityofregulationarewhatmattermostfora goodperformanceintheeaseofdoingbusiness ranking. top20economiesthisyear(theonlySub-SaharanAfricaneconomytodoso),hasreformed itsbusinessenviron-mentmethodicallyovertime.Indeed,overthe past decadeMauritiushasreformedmore thanonceinalmostallareasmeasuredbyDoingBusiness.18 Followingsevenreformsintheareaofpropertyregistration capturedbyDoing Businesssince2005,forexample,thetimeneededtoregisterpropertyhasdecreasedmorethan12 times; the timeneededforbusinessincorporationhasdecreasedalmost10timesasaresultoffourreforms instartingabusiness.19 Thetop20economiesshareanumberofinternationalgoodpractices.Intheareaofstartingabusiness,13oftheseeconomieshaveatleastoneprocedurethatcanbecompletedonlinein0.5days.Theelectricitydistributionutilitiesinallbutoneofthetop20economiesuseautomatedtools,allowingforfaster,moreefficientandmoresecurerestora-tionofserviceduringpoweroutages.Intheareasofconstructionandlandadministration,in alltop20 economiesmandatoryinspectionsarealwaysdoneinpracticeduringtheconstructionofawarehouse,andthemajorityhavecomprehensivegeographiccoverage.Thequalityoflegalinfrastructureandthestrengthoflegalinstitutionsisalsorobust.Inalltop20economies,forexample,theinsolvencyframeworkstipulatesthatacreditorhastherighttoobjecttodecisionsacceptingorrejectingcreditors’claims,providing A continuousandfocusedreformagendakeepsaneconomycompeti-tiveandvigilant,asothersalsokeepimproving.Twoeconomiesthatenterthetop20thisyear—theUnitedArabEmiratesandMalaysia—havemain-tainedsuchareformmomentum.TheUnitedArabEmiratesisthehighest-rankingeconomyintheMiddleEastandNorthAfricaregion,withreformscapturedinfourareas.SixreformsinMalaysiaweremeasuredbyDoingBusiness,resultinginthesecondhighestregionalimprovementintheeaseofdoingbusiness score. Moretrendsemergefromthelistofthetop50economies.Regionally,almost60%ofthetop50economiesarefrom theOECDhigh-incomegroup,followedbyEuropeandCentralAsia(24%)andEastAsiaandthePacific(12%).SouthAsiaandLatinAmericaandtheCaribbeanarethetworegionsabsentfromthetop50ranking.Upper- middle-incomeeconomiesrepresentalmost26%ofthetop50economies.Georgia,KosovoandMoldovaarethethreelower-middle-incomeeconomiesonthelistandRwandaistheonlylow-incomeeconomy.Thereis,however,a large variation between regions’regula-toryefficiencyandregulatoryquality(figure1.2).Whilefourofthe10topimproversinDoingBusiness2019are Twelveofthetop20economiesare fromthe OECDhigh-incomegroup; fourarefromEastAsiaandthePacific,twoarefromEuropeandCentralAsiaand Sub-SaharanAfricaneconomies,the strongsafeguardstocreditorsin oneeachisfromSub-SaharanAfrica

9. OVERVIEW 5 Source:DoingBusinessdatabase. Note:TheeaseofdoingbusinessrankingsarebenchmarkedtoMay1,2018,andbasedontheaverageofeacheconomy’seaseofdoingbusinessscoresforthe10 topicsincludedintheaggregateranking.Fortheeconomiesforwhichthedatacovertwocities,scoresareapopulation-weightedaverageforthetwocities.A positivechangeindicatesanimprovementinthescorebetween2016/17and2017/18(andthereforeanimprovementintheoverallbusinessenvironmentasmeasuredbyDoingBusiness),whileanegativechangeindicatesadeteriorationanda0.00 indicatesnochangeinthescore.

10. 6 DOINGBUSINESS2019 FIGURE1.2Gapsbetweenregulatoryefficiencyandregulatoryqualityareobservedacrossallregions Averageeaseof doing business score(0–100)100 80 60 40 20 0 OECDhighincomeEurope& CentralAsia EastAsia & Pacific MiddleEast & NorthAfrica LatinAmerica & Caribbean SouthAsia Sub-SaharanAfrica Regulatoryquality Regulatoryefficiency Source:DoingBusinessdatabase. Note:Theeaseofdoingbusinessscoreforregulatoryefficiencyistheaggregatescorefortheprocedures(whereapplicable),timeandcostindicatorsfromthefollowingindicatorsets:startingabusiness(alsoincludingtheminimumcapitalrequirementindicator),dealingwithconstructionpermits,gettingelectricity,registeringproperty,payingtaxes(includingthepostfilingindex),tradingacrossborders,enforcingcontractsandresolvinginsolvency.Theeaseofdoingbusinessscoreforregulatoryqualityistheaggregate scoreforgettingcreditandprotectingminorityinvestorsaswellastheregulatoryqualityindicesfromtheindicatorsetsfordealingwithconstructionpermits,gettingelectricity, registeringproperty,enforcingcontractsandresolvinginsolvency. lattereconomies sharemanyofthegoodpracticesfoundinOECDhigh- incomeeconomies,includingreliablesecuredtransactionlaws androbustcreditinformationsharingavailablethroughcreditbureaus orregistries. makerstolearnfromtheexperienceoftheirneighbors.Intheareaofgettingcredit,forexample,officialsinAngola(ranked184)andEritrea(186)couldlearnfromtheexperienceofRwandaandZambia(bothranked3).Thetwo regionhasroomforfurtherprogress:itsaverageeaseofdoingbusinessscoreforregulatoryqualityislessthan40,comparedto73inOECDhigh-incomeeconomies.Similarly,theaverageeaseofdoingbusinessscoreforregulatoryefficiencyis60,comparedto85amongOECDhigh-incomeeconomies. FIGURE1.3ResolvinginsolvencyistheareawiththebiggestgapbetweenSub-Saharan AfricaneconomiesandOECDhigh-incomeeconomies Averageeaseofdoingbusinessscore(0–100) Notsurprisingly,largegapsexistbetweentheperformanceofSub-SaharanAfricaandOECDhigh-incomeeconomies (figure 1.3).Sub-SaharanAfrican econo-miesscoresignificantlylowerthanthemostefficienteconomiesinallareas.Thegapinthescoreissignificantlywiderintheareasoftradingacrossborders(41points)andgettingelectricity(36points).Theareawiththelargestscore differenceisresolvinginsolvency,wherethegapbetweenSub-SaharanAfricaneconomiesandthebestperformersis44points. 100 80 60 40 20 0 StartingaDealingPayingTradingRegisteringGettingEnforcingProtectingGettingResolving businesswithtaxesacrosspropertyelectricitycontractsminoritycreditinsolvency constructionbordersinvestorspermits Sub-SaharanAfricaOECDhighincome SubstantialvariationsinperformanceamongSub-SaharanAfricanecono- miespresentanopportunityforpolicy Source:DoingBusinessdatabase.

11. OVERVIEW 7 Theareaofresolvinginsolvencyisthemostchallengingofallworldwide(figure1.4),yetthisshouldnotdiscourageeconomiesfromtakingstepsinthisdirection.Forexample,in2017/18,asaresultofintroducingseveralchangestoitsinsolvencyframework,includingfacili-tatingthecontinuationofthedebtor’sbusinessduringinsolvencyproceedings,providingforequaltreatmentofcredi-torsinreorganizationproceedingsandgrantingcreditorsgreaterparticipationintheinsolvencyproceedings,Kenyaprogressedtowardthebestregulatorypracticeby14pointsinthescoreforresolvinginsolvency. SubstantialvariationsinperformanceamongSub-SaharanAfricaneconomiespresentanopportunityforpolicymakers tolearnfromtheexperienceoftheirneighbors. Themajorityofthesereformshavebeenmadeinlow-andlower-middle-incomeeconomies.Inthisyear’sreport,73%oflow-incomeeconomiesand85%oflower-middle-incomeeconomiesreformedinatleastonearea.Suchreformdynamismexplainsthesignificantimprovementsinbusinessregulationthatlow-andlower-middle-incomeeconomieshaveachievedcomparedtoupper-middle-incomeandhigh-incomeeconomies(figure1.5). economy—ranks25forpayingtaxesbut112forgettingcredit. Iftheprocessofstartingabusinessisalreadyrelativelyeasy,butthelackofacreditinformationsystemoracollateralregistercanmakeitdifficultforfirmstoobtaincredit,entrepreneurswillfacehurdlesthatcouldnegativelyimpactthewidereconomyastheystruggletomeettheirpotentialorcompete.Theoppositecanalsobetrue—aneconomycanhaveahigh-qualitylandadministrationsystemandreliablecreditreportingmechanisms,butcumbersomebusinessincorpora-tionprocesses.Asaresult,firmsmaybediscouragedfromformalentry,withnegativeconsequencesfortheeconomyincludinglowerratesofformalemploy-mentandtaxcollection. Variationacrossareasofregulation,asmeasuredbytheeaseofdoingbusinessranking,isalsofrequentlyobservedacrossalleconomies,regardlessofincomelevel.Amonghigh-incomeeconomies,forexample,NewZealandranks1forstartingabusiness,but21forenforcingcontracts.Rwanda,alow-incomeeconomy,ranks2forregis-teringpropertyand3 forgetting credit,but88fortradingacrossbordersand51forstartingabusiness. Chinaisranked 6 forenforcingcontractsbut28forstartingabusiness,whileMorocco—classifiedasalower-middle-income Thethreeregionswhichhaveimprovedthemostsince2004areEuropeandCentralAsia,Sub-SaharanAfricaandtheMiddleEastandNorthAfrica.Together,theseregionshaveintro-ducedmorereformsthantheotherfourregionscombined.With905 reforms,Sub-SaharanAfricaholdstherecordforthehighesttotalnumberofreformscapturedbyDoingBusinessoverthepast15years.Moreover,theregionalsorecordedthehighestnumberofreformsin11ofthose 15years.Forthesame SinceDoingBusiness2005morethan3,500businessregulatoryreformshavebeenimplementedacrossthe190economiesmeasuredbyDoingBusiness. FIGURE1.4Whichareaiseasierforentrepreneursandwhichismoredifficult? Averageeaseofdoingbusinessscore(0–100)100 80 60 40 20 0 StartingaDealingwithbusinessconstruction permits Getting electricity Registering property Getting credit Payingtaxes Tradingacrossborders Protecting minorityinvestors Enforcing contracts Resolving insolvency Source:DoingBusinessdatabase.

12. 8 DOINGBUSINESS2019 FIGURE1.5Low-andlower-middle-incomeeconomieshavemadebiggerimprovementsovertime Averageyear-on-yearimprovementineaseofdoingbusinessscore 20 15 10 5 0 Lowincome Lowermiddleincome Uppermiddleincome Highincome Averageglobalimprovement Source:DoingBusinessdatabase. Note:Theredlineshowstheaverageglobalimprovementintheeaseofdoingbusinessscoresince2004.Themeasureisnormalizedtorangefrom0to100,with100representingthebestregulatoryperformance.Becauseofchangesovertheyearsinmethodologyandintheeconomiesandindicatorsincluded,theimprovementsaremeasuredyearonyearusingpairsofconsecutiveyearswithcomparabledata. index;todaytheirscoreisalmost6—within0.4pointsofthehigh-incomeeconomyaverage.Althoughthisshowsasubstantialgradualconvergence,notallareashaveexperiencedthesamepaceofimprovement.Since2006low-incomeeconomieshavereducedthetimetopaytaxes,forexample,byonly29hoursonaverage,comparedtoareductionof57hoursonaverage—nearlytwiceasmuch—byhigh-incomeeconomies(whichhad100-hoursfasterheadstarton averagetobeginwith). period, EuropeandCentralAsiahas,however, maintained the highestaveragenumberofreformspereconomyperyearmakingiteasiertodobusiness(2.03), followedbySub-SaharanAfrica(1.26)andSouthAsia(1.23). wheneconomiesadoptbusiness-friendly regulation.21 WHICHECONOMIESIMPROVEDTHEMOSTINDOINGBUSINESSIN2017/18? Slowly,butconsistently,theeconomiesmostinneedofbusinessregulatoryreformareadoptingglobalgoodpracticesandconvergingtowardthebestregula-toryperformance.In2006theaveragetimetostartabusinessinSub-SaharanAfricaneconomieswas59days;todaytheaverageis23days,significantlyclosertothehigh-incomeeconomyaverageof9days(figure1.6).Similarly,thegapbetweenlow-andhigh-incomeecono-miesontheextentofdisclosureindexhasnarrowedoverthepastdecade.20In2009low-incomeeconomiesaveraged a Governmentsworldwide investsubstan-tialeffortinchangingbusinessregulatoryframeworkstomakedoingbusinesseasierforentrepreneurs.Sucheffortscanrangefromstraightforwardchanges(forexample,reducingthefeesforobtainingabuildingpermitinCambodiaorpublishingfeeschedulesandservicestandardsforpropertytransferinTunisia)tosubstantialrevisionsoflegislation(theKyrgyzRepublic’snewcivilprocedure code)ortheestablishmentofnewinsti-tutions(suchasspecializedcommercial Changetakestime,especiallywhenthestartingpointischaracterizedbyweakinstitutionsandcostly,cumbersomeprocesses.However,thereformtrendscapturedbyDoingBusinesssuggestastrongimpetusforchangeinlow-andlower-middle-incomeeconomies.Recent researchshowsthatpovertyisreduced benches inEthiopiaorintermediate scoreof4.6ontheextentofdisclosure

13. OVERVIEW 9 FIGURE1.6Areaswhereeconomiesareconvergingandareaswheretheyarenot Averagecosttoobtainanelectricityconnection(%ofincomepercapita) Averagetimetostartabusiness(days) 70 7,000 60 6,000 50 5,000 40 4,000 30 3,000 20 2,000 10 1,000 0 0 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 DB2014 DB2015 DB2016 DB2017 DB2018 DB2019 DB2010 DB2011 DB2012 DB2013 DB2014 DB2015 DB2016 DB2017 DB2018 DB2019 Sub-SaharanAfrica OECDhighincome Sub-SaharanAfrica OECDhighincome Averagetimetoprepare, filereturnsandpaytaxes(hours) Averageextentofdisclosureindexinprotectingminorityinvestors(0–10) 7 350 6 300 5 250 4 200 3 150 2 100 1 50 0 0 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 DB2014 DB2015 DB2016 DB2017 DB2018 DB2019 DB2009 DB2010 DB2011 DB2012 DB2013 DB2014 DB2015 DB2016 DB2017 DB2018 DB2019 Highincome Lowincome Highincome Lowincome Source:DoingBusinessdatabase. Note:Theupperleft-handsidegraphincludes174economieswheredataisavailablebacktoDoingBusiness2006.Theupperright-handsidegraphincludes183economieswheredataisavailablebacktoDoingBusiness2010.Thelowerleft-handsidegraphincludes182economieswheredataisavailablebacktoDoingBusiness2009.Thelowerright-handsidegraphincludes174economieswheredataisavailablebacktoDoingBusiness2006. howDoingBusinessidentifies changesasareform,seethedatanotesathttp://www.doingbusiness.org. regulatoryreformsimprovingthebusi-nessclimate(seetable1A.1attheendofthischapter).ThepreviousrecordwassetbyDoingBusiness2017,which captured290reformsimplementedby137economies(figure1.7).Almostone-thirdofallreformsrecordedin customspostsinEl Salvador).Whilethevarietyofactivitiesthatcanbeundertakentoimprovetheease of doingbusinessisextensive,theyareallaimedatstreamliningprocesses,increasingproceduralandlegislativeefficiencyandimprovingtheaccessibilityand transpar- Inthepastyear,DoingBusinessobservedapeakingofreformactivityworldwide.FromJune2,2017,toMay1,2018,128 2017/18wereimplementedintwo economiesimplementedarecord314 encyofinformation.Formoredetailson

14. 10 DOINGBUSINESS2019 FIGURE1.7DoingBusiness2019capturedarecord314reformsin128economies Reformscapturedby DoingBusinessyear(number) 350 Resolvinginsolvency 300 Enforcingcontracts 250 Tradingacrossborders Payingtaxes 200 Protectingminorityinvestors 150 Gettingcredit Registeringproperty 100 Gettingelectricity 50 Dealingwithconstructionpermits Startingabusiness 0 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 DB2014 DB2015 DB2016 DB2017 DB2018 DB2019 Source:DoingBusinessdatabase. Note:ThegettingelectricityindicatorsetwasaddedinDoingBusiness2012.Thereport’sgeographicalcoveragehasgraduallyexpandedfrom178economiesinDoingBusiness 2008to181inDoingBusiness2009,183inDoingBusiness2010,185inDoingBusiness2013,189inDoingBusiness2014and190economiessinceDoingBusiness2017. siteinspectionsorbankcertificatespriortocompanyincorporation.Byallowingvoluntaryvalueaddedtaxregistrationatthetimeofbusinessincorporation,Georgiareduceditsrelativegaptothebestregulatoryperformanceonstartingabusinessthemostin2017/18.Previously,entrepreneurshadtomakeaseparatevisittotheRevenueServiceforvalueaddedtaxregistrationaftercompanyregistration.Georgiaalsoenhanceditsexistingone-stopshopforbusinessincorporation,allowingentre-preneurstostartacompanythroughasingleprocedure. areas—startingabusinessandenforcing contracts(table1.2).DoingBusiness2019alsorecordedthelowestnumberofchangestomakingitmoreburden-someforbusinessestooperatesinceDoingBusiness2007.22 startingabusinesseasierbyreducingtheprocedures,timeorcostassociatedwithcompanyincorporation.Twenty-threeofthe50economiesthatreformedinthisareadid so by simplifying preregistrationorregistrationformalities.Suchchangescanvaryfromintegratingmultipleappli-cationformsintoasingleregistrationtemplatetoabolishingrequirementsfor In 2017/18,one-quarterofeconomiesmeasured byDoingBusinessmade Thesecondhighestnumberofbusi-nessregulatoryreforms(49)capturedbyDoingBusiness2019isintheareaofenforcingcontracts.Thisuptickinreformcanbeattributedmainlytotheachievementsofthe17memberstatesoftheOrganizationfortheHarmonizationofBusinessLawinAfrica,knownbyitsFrenchacronymOHADA.Theorganiza- tionadoptedaUniformActonMediationin2017(fillingalegislativevoidthatexistedinmostOHADAmember states)whichintroducedmediationas

15. OVERVIEW 11 Caribbean(whichisthefourthhighest scoringregion)hadthesecondlowestshareofreformerswith56%ofecono-miesimplementingreformsin2017/18.Naturally,economiesinthesetworegionshadthelowestaverageincreaseintheir easeofdoingbusinessscorein2017/18:+0.16pointsonaverageinOECDhigh-incomeeconomies(whichisthehighestperformingregionandthere-fore haslittleroomforimprovement)and+0.22pointson averageinLatinAmericaandtheCaribbean. economiesinSub-SaharanAfrica.BothregionscapturedreformsineverytopicmeasuredbyDoingBusiness.Indeed,reformsundertakenbyeconomiesinthesetworegionsrepresenthalfofallreformsrecordedglobally.In2017/18Sub-SaharanAfricaimplementedthemostreformseverrecordedbyDoing Businessandthehighesttotalnumberofreformingeconomies. Onaverage,Sub-SaharanAfricaneconomiesincreasedtheireaseofdoingbusinessscoresby0.99pointsthisyear,slightlybelowtheaverageimprovementof1.00pointforecono-miesinEuropeandCentralAsia.Withanincreaseof2.73pointsonaverage,SouthAsianeconomiesrecordedthelargestscoreimprovement. Thisachieve-mentisnotsurprisingastheregionhasthehighestaveragenumberofreformsperreformingeconomy—atotalof19reformswereimplementedbyfiveoftheeighteconomiesthatcomprisetheregion.ThelowestshareofreformerswasobservedintheOECDhigh-incomegroupwhere16of34economiesimple-mentedatotalof23reforms(or7%oftheglobal count).LatinAmericaandthe anamicablemodeofdisputesettle-ment.TheOHADAUniformAct adoptsa broadscopeofapplicationbycoveringconventionalandjudicialmediationandsetsouttheguidingprinciplesfortheconductofmediation. DoingBusinessalsorecordedahistoricnumber ofreforms(26)in theareaofgettingelectricity.EastAsiaandthePacifichasthehighestshare ofreformers,with28% ofeconomies fromthisregionimprovingonthegettingelectricityindicators.Sub-SaharanAfricaneconomiesrecordedeightreformsinthis area, the highestnumberofany region worldwide. Worldwide,the10economiesshowingthemostnotableimprovementinperformanceontheDoingBusinessindicatorsin2017/18areAfghanistan,Djibouti,China,Azerbaijan,India,Togo,Kenya,Côted’Ivoire,TurkeyandRwanda(table1.3).Together,theseeconomiesimplementedatotalof62businessregulatoryreformsacrossallareasmeasuredbyDoingBusiness. Overall,the10topimproversimple-mentedthemostregulatoryreformsintheareasofstartingabusiness,gettingcreditandpayingtaxes(witheightreformsineacharea).Thisverydiversesetofeconomiesincludes TheeconomiesofEuropeandCentralAsiaandSub-SaharanAfricawerethemostactiveinreformingtheirregula-toryframeworksin2017/18,withfourofeveryfiveeconomiessubstantiallyimprovingbusinessregulationsinbothregions.NineteeneconomiesinEuropeandCentralAsiaimplementedatotalof54regulatoryreformsimprovingthebusinessenvironment.Atotal of 107businessregulatoryreformswererecordedbyDoingBusinessacross40 Source:DoingBusinessdatabase. Note:Economiesareselectedonthebasisofthenumberofreformsandrankedonhowmuchtheireaseofdoingbusinessscoreimproved.First,DoingBusinessselectstheeconomiesthatimplementedreformsmakingiteasiertodobusinessinthreeormoreofthe10areasincludedinthisyear’saggregateeaseofdoingbusinessscore.Regulatorychangesmakingitmoredifficulttodobusinessaresubtractedfromthenumberofthosemakingiteasier.Second,DoingBusinessrankstheseeconomiesontheincreaseintheireaseofdoingbusiness scorefromthepreviousyear.Theimprovementintheirscoreiscalculatednotbyusingthedatapublishedin2017butbyusingcomparabledatathatcapturedatarevisions.Thechoiceof themostimprovedeconomiesisdeterminedbythelargestimprovementsintheeaseofdoingbusinessscoreamongthosewithatleastthreereforms.

16. 12 DOINGBUSINESS2019 Indiaalsocontinuedtostreamlineand centralizeitsconstructionpermittingprocess.Regardinggettingelectricity,newly-adoptedregulationsfromtheDelhiElectricityRegulatoryCommissionrequirethatelectricalconnectionsbecompletedwithin15daysoftheapplication’sacceptance.Tocomplywiththisregulation, TataPowerDelhiDistributiondeployedmorepersonnelaswellastrackingtoolsandkeyperfor-manceindicatorstomonitoreachcommercialconnection. andintroducedaunifiedapplicationforinspectionscarriedoutafter thecomple-tionofconstruction.Similarly,theDistrictReal EstateRegistriesofboth Beijing andShanghaiimplementedanewconnectedplatformstreamliningtheregistrationprocessfornewbuildings.Tofacilitatecross-bordertrade,Chinaimplementedanationaltradesinglewindowlinkingthe customsandtaxadministration, portauthorities,theMinistryofCommerceandotheragenciesinvolvedintheexport andimportprocesses. someofthelargestandthesmallestintheworld,showingthateconomiesofallsizescanbesuccessfulreformersinDoingBusiness. Afghanistan—thetopimproverinDoing Business2019—focusedonenhancingthelegal frameworkforbusinesses.Minorityinvestorprotectionswerestrengthenedsubstantially,makingAfghanistanoneoftheeconomiesadvancingmostinthisarea.Anewlawonlimitedliabilitycompaniesmadenoteworthy progresstowardmitigatingtherisksofprejudicial conflictsofinterestincompaniesandstrengtheningcorporategovernancestructures.Inaddition,theCommercialProcedureCodewasamendedtograntgreaterpowerstoshareholderstochallengerelated-partytransactions.Afghanistanalsoadoptedanewinsol-vencylegalframeworkin2018. DjiboutiandIndiaaretheonlyeconomiestomakethelistof10topimproversforthesecondconsecutiveyear.Djiboutiintroducedatotalof11businessregula-toryreformsinthepasttwoeditionsofDoingBusiness,whileIndiamade14sizeableimprovementsduringthesameperiod.Djibouti,theonlyeconomyfromtheMiddleEastandNorthAfricaregioninthelistof10topimproversthisyear,hastargeteditsreformagendatowardstrengtheningitslegalframework.Forexample,DjiboutiimplementedstrictdeadlinesforregisteringthepropertysaleagreementwiththeTaxAuthorityanddigitizingitslandregistry.Thecountryalsomadesubstantialenhancementstotheprocessofresolvingcommer- cialdisputesbyadopting a newcivil Indiaalsofocusedonstreamliningbusi-ness processes.UnderitsNationalTradeFacilitationActionPlan2017-2020,Indiaimplementedseveralinitiativesthatimprovedtheefficiencyofcross-bordertrade,reducingborderanddocumentarycompliancetimeforbothexportsandimports(figure1.9).Enhancedrisk-basedmanagementnowallowsexporterstosealtheircontainerselectronicallyattheirownfacilities;aslittleas5%ofshipmentsmustundergophysicalinspections.Indiaalsoinvestedinportequipment,strengthenedmanagementandimprovedelectronicdocumentflow.ByimplementingtheSingleWindowClearanceSysteminDelhiandtheOnlineBuildingPermitApprovalSysteminMumbaiduringthesecondhalfof2017, Thetwoeconomieswiththelargestpopulations,ChinaandIndia,demon-stratedimpressivereformagendas.Bothgovernmentstookacarefullydesignedapproachtoreform,aimingtoimprovethebusinessregulatoryenvironmentoverthecourseofseveralyears.China istheonlyeconomyfromEastAsiaandthePacifictojointheDoingBusiness2019listof10topimprovers.Chinafocuseditsreformeffortsin2017/18onincreasingtheefficiencyof businessprocesses.The utilitydistributioncompaniesinbothBeijingandShanghaiundertookseveral initiativesthatsignificantlyreducedthetimetoobtainanewelectricityconnec-tion(figure1.8).ChinadigitalizednewgridconnectionapplicationsofferingonlinepaymentwhileeliminatingtheexternalsitevisitfromtheutilityinBeijing.Duringthefirsthalfof2018,Chinaintroducedreformmeasurestostream- lineitsconstructionpermittingprocessbyimplementingunifiedplatformsforallbuildingreviewprocessescarriedoutbeforetheapprovalofabuildingpermitinbothBeijingandShanghai.Thereformsalsosimplifieddocumentationrequire-ments,improvedprocessingtimes, FIGURE1.8Chinasignificantlyreducedthetimetogetanewelectricityconnectionin2017/18 Timetoobtainanewelectricityconnection(days) 150 120 90 60 30 0 DB2018 DB2019 Shanghai Beijing expandedpublicaccesstoinformation Source:DoingBusinessdatabase.

17. OVERVIEW 13 whileKenyasimplifiedtheprocessofprovidingvalueaddedtaxinformationbyenhancingitsexistingonlinesystem,iTax.Rwandastreamlinedtheprocessofstartingabusinessbyreplacingitselectronicbillingmachinesystemwithnewsoftwarethatallowstaxpayerstoissuevalueaddedtaxinvoices.Thefreesoftware,whichisprovidedbytheofficeoftheRevenueAuthority,allowstaxpayerstoissuevalueaddedtaxinvoicesfromanyprinter,eliminatingthepreviousrequirementtopurchaseandsetupaspecialbillingmachine.Togomadeitfastertocheckcompanynameavailabilitybyfullyoperational- izingitsonlineone-stopshop.Digitalsolutionswerealsoimplementedintheareaofpropertyregistration.Togodevelopedanambitiousdigitizationprojectformodernizingitslandadmin- istrationsystemand,byFebruary2018,97.2%ofalllandtitlesinLoméhadbeenscanned.InKenya,theMinistryofLandsandPhysicalPlanningimplementedanonlinelandrentfinancialmanage-mentsystemontheeCitizenportal,enablingpropertyownerstodeterminetheamountowedinlandrent,makeanonlinepaymentandobtainthelandratesclearancecertificatedigitally.Rwanda’sLandManagementandUseAuthoritylaunchedanewwebsite,whichnowincludesstatisticsregardingthenumberoflanddisputesregisteredin2017 foralljudiciarydistricts.TheNationalAgriculturalExportDevelopmentBoardofRwandaalsointroducedanonlinesystem,allowingcertificatesof origintobeissuedelectronically. FIGURE1.9Indiadecreasedborderanddocumentarycompliancetimeforbothexportsandimports Timeforcompliance(hours) 300 250 200 150 100 50 0 Importsborder Exportsborder Importsdocumentary Exportsdocumentary DB2018 DB2019 Source:DoingBusinessdatabase. tocredit,Azerbaijanestablishedanewcreditbureauandanewunifiedcollat-eralregistry.InTurkey,thegovernment’sreformeffortfocusedonimprovingtheelectronicprocessingofdocumentsandprovidingmoreinformationonspecificregulations.Istanbulandothermunici-palitiesacrossthecountrypublishedontheirwebsitesallrelevantregulations,feeschedulesandpre-application require-mentsrelatedtoconstructionpermits. TheMinistryofJusticenowpublishesalljudgmentsrenderedbytheIstanbulcommercialcourts,thecivilcourtsofintellectualandindustrialrightsandtheIstanbulRegionalCourtofJusticeonlegaldisputesconcerningcommercial,intel-lectualandindustrialrightssince2014.Furthermore,theBanksAssociationofTurkeyRiskCenterbegansharingcreditinformationfromseventelecommunica-tionscompanies. procedurecodethatregulatesvoluntary conciliation,mediationproceedingsandcasemanagementtechniques,includingtimestandardsforkeycourtevents.Enforcingcontractsiseasierfollowingthecreationofadedicateddivisionwithinthe courtoffirstinstancetoresolvecommer- cialcases.Withregardstoresolvinginsolvency,Djiboutiestablishedequaltreatmentofcreditorsinreorganizationproceedingsandincreasedcreditors’participationbygrantingthemtherighttoapprovetheappointmentoftheinsolvencyrepresentativeandthesaleofsubstantialassetsofthedebtorinthe courseofinsolvencyproceedings. InEuropeandCentralAsia,Azerbaijanimplementedeightreformsmakingiteasiertodobusinessin2017/18,arecordnumberamong the10topimproversandglobally,and Turkeyimplementedsevenreforms.Severalofthesereformsinvolveinstitutionalchanges.Azerbaijanopened asinglewindowattheBakuCity ExecutiveOfficefordealingwithconstructionpermits,forexample,reducingthetimetoobtainabuildingpermitby80daysandthecostby12,563manat(about$7,500).Anotherone-stopshop—theAsanCommunalfacility—streamlinedtheprocessofconnecting Brazil,whichrecordedthelargestscoreimprovementinLatinAmericaandtheCaribbeanin2017/18,reformedinfourareasmeasuredbyDoingBusinessaspartofthecountry’songoingefforttostrengthenitsbusinessenvironment.Brazilintroducedelectroniccertificatesoforiginin2017,forexample,followingapilotprojectthatbeganinOctober2016.AftersigningtheDigitalCertificatesofOriginActwithArgentinaunder Withfoureconomies—Côted’Ivoire,Kenya,RwandaandTogo—Sub-SaharanAfricaisthemostrepresentedregionintheDoingBusiness2019listof10topimprovers.Digitizationwasacommonthemeamongthebusinessregulatoryreformsrecordedbythesefourecono-mies.Côted’IvoireandTogointroducedonlinesystemsforfilingcorporate theframeworkoftheLatinAmerican income taxandvalueadded taxreturns, totheelectricitygrid.Toimproveaccess

18. 14 DOINGBUSINESS2019 everycaseisuniqueandavarietyoffactorsinfluenceeacheconomicenviron-ment;businessregulationisonlyoneofthosefactors.Politicalstability,thelevelofeconomicdevelopment,naturalresourceendowment,culturalspecifics,environ-mentalriskandmanyotherelementscan eachplayaconsequential roleintheabilityofaneconomytoimplementregu-latorychangesuccessfully.Whilesomefactorscannotbeinfluenced,othersliewithingovernments’directcontrol,forexamplethe leveloftrainingprovidedtocivilservants and the wayinwhichregu-latorychangeiscommunicated. IntegrationAssociation,certificatesoforiginforautopartsimportsfromArgentinaarenowobtainedelectronically,reducingdocumentprep-arationandcompliancetimeforBrazilianimporters.Brazilmadestartingabusi-ness easier by launchingonline systemsforcompanyregistration,movingitsscoreforstartingabusiness(80.23)closertotheglobalaverage.Overall,theBRICeconomies—Brazil, Russia,IndiaandChina—improvedtheiraverageeaseofdoingbusinessscorebyacombinedtotalofalmost19pointsacrossvariousareasofbusinessregulation.Allfoureconomiesimprovedintheareaofgettingelectricityandpassedreformssimplifyingtheprocessoftradingacrossborders. ofEconomicLaw.Thescopeofapplica-tionofthelaw,traditionallylimitedtomerchants,wasextendedtoincludetheliberalprofessions,“secondchance”ruleswerestrengthenedandtheCodewasamendedtoprovideforthedigitaliza-tionofallinsolvencyproceedingsintoasolvencyregister. DOESTRAININGCIVILSERVANTSANDCOMMUNICATINGREGULATORYCHANGESAFFECTTHEBUSINESSCLIMATE? Doing Businessdatashowthatacrosseconomiesthereisasignificantposi- tiveassociationbetweentheavailability oftrainingprogramsforpublicofficialsandstreamlinedbusinessregulation(figure1.10).From theperspectiveofserviceproviders—suchasofficersatlandregistries,judges,prosecutorsorengineers—trainingservesasaplatformtoacquirenewskillsandkeepexistingknowledgeuptodate.23Suchtrainingimprovesexperts’productivityand Reformeffortswillnotalwaysresultinimmediateimprovements;indeed,somemayhavenoimpactatall.Efficientdesignandpoorimplementationarejusttwofactorsthatexplainwhysomereformssucceedwhileothersfail.Oncenewregulationisenacted,itmustbebroughtto practice—theroleofdissemi-nationshouldnotbeunderestimated.Theprocessof improving abusinessenviron-mentoftenspansseveralyears.Naturally, AmongOECDhigh-incomeeconomies,Belgiumrecordedthelargestimprove-mentinDoingBusiness2019bystrengtheningaccesstocredit.Italsointroducedchangestoitsinsolvencylegal framework.Twolawsrelatingtoreorga-nizationandliquidationwerestreamlinedintooneandintegratedintotheCode FIGURE1.10Moretrainingopportunitiesforpublicofficialsareassociatedwithahighereaseofdoingbusinessscore Averageeaseofdoingbusinessscore(0–100) Averageeaseofdoingbusinessscore(0–100) 100 100 80 80 60 60 40 40 20 20 0 0 0 1–23–5 Countoftopicswithtrainingprovidedtogovernmentofficials(0–5) 0 1–23–4 Countofpractitionerswithlegaldegreerequirement(0–4) Source:DoingBusinessdatabase. Note:ThecountofDoingBusinesstopicsforwhichtrainingisofferedtopublicsectorofficialsrangesfrom0to5,whereeachtopicwithgovernment-providedtrainingcountsas1(left-handfigure).Thetopicsareasfollows:startingabusiness(+1), registeringproperty(+1), gettingelectricity(+1), payingtaxes(+1)andtradingacrossborders(+1).Therelationshipissignificantatthe1%levelaftercontrollingforincomepercapita.Thesamplecomprises166economies.Thelegaldegreerequirementcount(right-handfigure)rangesfrom0to4whereeachtypeoflegalpractitionerrequiredtoholdanadvanceddegreecountsas1.Thetypesoflegalpractitionerareasfollows:practicinglawyers(+1), judges(+1), insolvencyrepresentatives(+1)andlawclerks(+1).Therelationshipissignificantatthe1%levelaftercontrollingforincomepercapita.Thesamplecomprises 86economies.

19. OVERVIEW 15 effectivelycommunicatechangestolegislativeprocessestendtobeassoci-atedwithbetterbusinessregulationandmorereforms.Whiletheseresultscannotbeinterpretedascausal,theydosignaltopolicymakersthatpublic-privatedialogueisapowerfultoolforincreasingthenumberofreformsandimprovingbusinessregulatoryefficiency (figure 1.11). capacitytoservecustomers,whointurnbecomebetterinformedaboutnewregulatoryrequirementsorprocesses.Thosewithabetterunderstandingofbusinessregulatoryprocessesarelikelytocomplymoreoftenwiththerequiredrulesandprocedures.Improvedunder-standing,clarityandtrustinregulatoryrequirementsareassociatedwithmoreefficiencyintheregulatoryframework.24 businessscore.Governmentsthatmakechangestolawsorprocedurespubliclyavailablethroughregulatorywebsitesarealsolikelyto performbetter on the Doing Businessindicators. WHATISNEWINTHISYEAR’SREPORT? Tofurtherexplorethelinksbetweentrainingandthesuccessfulimplementa-tionofbusinessregulation,DoingBusiness2019presentsfourcasestudieswitha specificfocusontrainingopportunitiesforpublicofficialsandcommunicationofregulatorychanges.Thecasestudyonstartingabusinessandregisteringpropertyanalyzesnewdataontrainingopportunitiesavailabletopublicofficialsatthebusinessandlandregistries.Itfindsthattheprovisionofmandatorytrainingforbusinessregistryofficersisassociatedwithhigherregistryefficiency.Similarly,holdingannualtrainingforlandregistryofficersisassociatedwithmoreeffectiveregistrationprocedures.Communicatingchangesatthebusiness Effectivepubliccommunicationofbusinessregulatoryreformnotonlyconstitutesgoodpractice—italsoimprovescompliancefromtheprivatesectorandholdsthepublicsectoraccountableforregulatoryviolations.28Specifically,regulatorswhoconductworkshopswiththepublicorinterestedstakeholdersaremorelikelytohavebetterefficiencyandqualityofbusinesslegislationintheirconstituencies.Notsurprisingly,economieswheregovern-mentscommunicateregulatorychangesthroughmedia—suchasbroadcastadvertisementsandannouncements, socialmedia,andmobileapplications—arelikelytohaveahighereaseofdoing Intheareaofjudicialperformance,thoseeconomiesthatmakethetrainingofjudgesmandatoryaremorelikelytoenjoyhigherresolutionratesandbetterjudicialdecisions.Indeed,thetrainingof judgesisimperativeforincreasedjudicialefficiencyandproductivity.25,26EvidencefromPakistanindicatesthatreformswhichprovidedjudgeswithtrainingare accompaniedbypositiveeffectson judicialefficiencyand, conse-quently,entrepreneurship.27 Beyondtraining,governmentshaveotheroptionstoenhancetheimplemen-tationofbusinessregulatoryreform.Economiesinwhichgovernments FIGURE1.11Communicationofregulatorychangesthroughmediacampaignsisassociatedwithbetterbusinessregulationandmorereforms Averageeaseofdoingbusinessscore(0–100) Businessregulatoryreformsin2017/18(number) 100 3 80 2 60 40 1 20 0 0 0–12–4 5+ 0–12–4 5+ Countoftopicswithmediacampaign(0–6) Countoftopicswithmediacampaign(0–6) Source:DoingBusinessdatabase. Note:Thecountoftopicswithmediacampaignrangesfrom0to6whereeachtopicwithamediacampaignlaunchedtoannouncechangestoregulationcountsas1.Thetopicsareasfollows:startingabusiness(+1), dealingwithconstructionpermits(+1), registeringproperty(+1), gettingcredit(+1), protectingminorityinvestors(+1)orpayingtaxes(+1). Boththeleft-handandright-handrelationshipsaresignificantatthe1%levelaftercontrollingforincomepercapita;bothsamplescomprise76economies.

20. 16 DOINGBUSINESS2019 Since2005atotaloffivereformshavebeencapturedinMauritiusinthe areaofstartingabusiness,butfourreformscontributedtothereductionintimeforbusinessincorporation. The extentofdisclosureindex rangesfrom0to10,withhighervaluesindicatinggreaterdisclosure. Djankov,GeorgievaandRamalho 2018. Twenty-threechangesmakingitmoreburdensomeforbusinessestooperatewererecordedinDoingBusiness2019. DeVaro,MaxwellandMorita 2017. Dabla-Norris,GradsteinandInchauste2008. Hadfield2008. Ichino,PoloandRettore2003. Chemin2009. Macchiavello2008. andlandregistries—through,forexample,providingworkshopsforregistryofficersorinformationcampaignsforsystemusers—isassociatedwithalowertimetocompletetransactions. NOTES EntrepreneurshipDatabase(http://www .doingbusiness.org/data/exploretopics /entrepreneurship),World Bank Group. Aghion,FallyandScarpetta2007;HerrendorfandTeixeira2011. Paunov 2016. Demenet,RazafindrakotoandRoubaud 2016. Sutherland2011. Agyeman,AbekaandAssiamah 2016. Abeberese 2016. AndersenandDalgaard2013. Aragón2015;Christiansen,SchindlerandTressel2013. Thecasestudyongettingelectricityhighlightsthebenefitsof comprehensivewiringregulation.Toadequately mitigatesafetyrisks,accreditationsystemsforelectriciansareessential,asareinspec-tionsofwiringinstallationsandliabilityregimes.DoingBusinessdatashowthatwhereelectricalconnectionprocessesare efficient, there also tendto berobustqualitycontrolstandards.Similarly,thecasestudyontradingacrossbordersdrawsonnewlycollecteddatatoillus-tratethattheuseofregulartrainingtoeducatecustomsclearanceofficialsandcustomsbrokersispositivelyassociatedwithlowerborderanddocumentarycompliancetimes. Berkowitz,LinandMa2015;Mitton 2016. Djankov,LaPortaandothers2008. Durnev,ErrunzaandMolchanov 2009. Gutiérrez2003. Chaurey2015. Carluccio2015. FormoreinformationontheresearchontheeffectsofbusinessregulationpublishedinDoingBusiness2014,seehttp://www .doingbusiness.org/en/reports/global-reports /doing-business-2014. FormoreinformationonthelegalresearchfindingsonbusinessregulationsandthelawpublishedinDoingBusiness2016,seehttp://www.doingbusiness.org/en/reports /global-reports/doing-business-2016. These areasinclude:startingabusiness(DB2019,DB2018, DB2015, DB2009,DB2008),dealingwithconstructionpermits(DB2018,DB2016,DB2008),registeringproperty(DB2019,DB2018,DB2017, DB2013,DB2010,DB2009,DB2008),gettingcredit(DB2014, DB2013, DB2010,DB2009,DB2007,DB2006),protectingminorityinvestors(DB2019),payingtaxes(DB2019,DB2008),tradingacrossborders(DB2019,DB2018,DB2010,DB2008,DB2006),enforcingcontracts(DB2015,DB2014,DB2011,DB2010),resolvinginsolvency(DB2014,DB2010,D2008).SubstantialchangeswereobservedinlabormarketregulationinDB2010. Thecasestudyonenforcingcontractsandresolving insolvencyexplorestheeducationandtrainingthatjudgesreceiveworldwide.Itfeaturesexamplesoftwojudicialsystems—IndonesiaandtheUnitedArabEmirates—eachwithadequateeducationand trainingframeworksincommercialandinsol-vencymatters.Theannexpresentsdataanalysisforthelabormarketregulationtopic,includinggeneraltrendsandtherelationshipwithfirmperformance.

21. OVERVIEW 17

22. 18 DOINGBUSINESS2019

23. OVERVIEW 19

24. 20 DOINGBUSINESS2019

25. OVERVIEW 21 Source:DoingBusinessdatabase. Note:Reformsaffectingthelabormarketregulationindicatorsareincludedherebutdonotaffecttherankingontheeaseofdoingbusiness.

26. DOINGBUSINESS2019 AboutDoingBusiness • DoingBusinessmeasuresaspectsof businessregulationaffectingsmallandmedium-sizedomesticfirmsdefinedbasedonstandardizedcasescenariosandlocatedinthelargestbusinesscityof190economies.Inaddition, for11economiesasecondcityiscovered. DoingBusinessis foundedontheprinciplethateconomicactivity benefits fromclearandcoherent rules:rulesthatsetout strongpropertyrights,facilitatetheresolutionofdisputes andprovidecontractualpartnerswithprotectionsagainstarbitrarinessandabuse.Suchrulesare muchmore effectiveinpromotinggrowthanddevelopmentwhentheyareefficient,transparent andaccessibleto thosefor whomtheyare intended. The strength andinclusivityof the rulesalsohave acrucialbearingon howsocietiesdistribute the benefitsandfinance the costsof developmentstrategiesandpolicies. • DoingBusinesscovers11areasof businessregulation. Tenoftheseareas—startingabusiness,dealing withconstructionpermits,gettingelectricity,registeringproperty,gettingcredit,protectingminorityinvestors,payingtaxes,tradingacrossborders,enforcingcontractsandresolvinginsolvency—areincludedintheease • ofdoingbusinessscoreandeaseof doingbusinessranking.DoingBusiness alsomeasures featuresoflabormarket regulation,whichisnotincludedinthesetwomeasures. environmentaffectingdomesticfirms.Itprovidesquantitativeindicatorsonregu-lationforstartingabusiness,dealingwithconstructionpermits,gettingelectricity,registeringproperty,gettingcredit,protectingminorityinvestors,payingtaxes,tradingacrossborders,enforcingcontractsandresolvinginsolvency(table2.1).DoingBusinessalsomeasuresfeaturesoflabormarketregulationwhicharereportedasaseparatesectionandnotincludedintheranking. Goodrulescreateanenvironment wherenewentrantswithdriveandinnova- tiveideascangetstartedinbusinessandwhereproductivefirmscaninvest,expandandcreatenewjobs.Theroleofgovernmentpolicyinthedailyoperationsofsmallandmedium-sizedomesticfirmsisacentralfocusoftheDoingBusinessdata.Theobjectiveisto encourageregu-lationthatisefficient,transparentandeasytoimplementsothatbusinessescanthriveandpromoteeconomicandsocialprogress.DoingBusinessdatafocusonthe11areasofregulationaffectingsmallandmedium-sizedomesticfirmsinthelargestbusinesscityofaneconomy.Theprojectusesstandardizedcasestudiestoprovideobjective,quantitativemeasuresthatcanbecomparedacross190economies. • DoingBusinessrelieson fourmainsourcesofinformation:therelevantlawsandregulations,DoingBusiness respondents,thegovernmentsofthe economiescoveredandWorldBankGroupregionalstaff. HowtheindicatorsareselectedThedesignoftheDoingBusinessindicatorshasbeeninformedbytheo-reticalinsightsgleanedfromextensiveresearch andthe literatureonthe roleofinstitutionsinenablingeconomicdevel-opment.1In addition,thebackgroundpapersdevelopingthemethodologyforeachoftheDoingBusinessindicatorsetshaveestablishedtheimportanceoftherulesand regulationsthatDoing Businessfocusesonforsucheconomicoutcomesastradevolumes,foreigndirectinvest- • Overthepast16yearsmorethan43,800professionalsin190economieshaveassistedinprovidingthedatathatinformtheDoingBusinessindicators. • DoingBusinessdataarewidelyused bygovernments,researchers, • internationalorganizationsandthinktanks toguidepolicies,conductresearchanddevelopnewindexes. FACTORSDOINGBUSINESSMEASURES • TherearenomethodologicalchangesinDoingBusiness2019 data. Doing Businesscapturesseveralimpor- ment(FDI),marketcapitalizationin tantdimensionsoftheregulatory

27. ABOUT DOINGBUSINESS 23 doingbusinessscoreaidsinassessingtheabsolutelevelofregulatoryperfor-manceandhowitimprovesovertime.The individualindicatorscoresshowthedistanceofeacheconomytothebestregulatoryperformanceobservedineachoftheindicatorsacrossallecono-miesintheDoingBusinesssamplesince2005orthethirdyearinwhichdatawerecollectedfor theindicator.Thebestregulatoryperformanceissetatthehighestpossiblevalueforindicatorscalculatedasscores,suchasthestrengthoflegalrightsindexorthequalityoflandadministrationindex.Thisunderscoresthegapbetweenaparticular economy’sperformanceandthebestregulatoryperformanceatanypoint intimeandisusedtoassesstheabsolutechangeintheeconomy’sregulatoryenvironmentovertimeasmeasuredbyDoingBusiness(seethechapterontheeaseofdoingbusinessscoreandeaseofdoingbusi-nessranking).Therankingontheeaseofdoingbusinesscomplementstheeaseofdoingbusinessscorebyprovidinginformationabout aneconomy’sperfor-manceinbusinessregulationrelativetotheperformanceofothereconomiesasmeasuredbyDoingBusiness. compliancecostsforfirmslow—suchasbyeasingtheburdenofbusinessstart-upformalitieswithaone-stopshoporthroughasingleonlineportal.Finally,thescoresreward economiesthatapplyarisk-basedapproachto regulationasa waytoaddresssocialandenvironmentalconcerns—suchasbyimposingagreaterregulatoryburdenonactivitiesthatposeahighrisktothepopulationandalesseroneonlower-riskactivi-ties.Thus,theeconomiesthatrankhighestontheeaseofdoingbusinessarenotthosewherethereisnoregula-tion,butthosewhere governments havemanagedtocreaterulesthatfacilitateinteractionsinthemarketplacewithoutneedlesslyhinderingthedevelopmentoftheprivate sector. stockexchangesandprivatecreditasapercentageofGDP.2 Thechoiceofthe11setsofDoing Businessindicatorshas alsobeenguidedby economicresearchand firm-leveldata,specificallydatafromtheWorldBankEnterpriseSurveys.3Thesesurveysprovidedatahighlightingthemainobstaclestobusinessactivityasreportedbyentrepreneursfrommorethan136,880companiesin139econo-mies.Accesstofinanceandaccessto electricity,forexample,areamongthefactorsidentifiedbythesurveysasimportanttobusinesses—inspiringthedesignoftheDoingBusinessindicatorsongettingcreditandgettingelectricity. DoingBusinessusesasimpleaveragingapproachfor weightingcomponentindicators,calculatingrankingsanddeterminingtheeaseofdoingbusiness score.4EachtopiccoveredbyDoing Businessrelatestoadifferent aspectofthebusinessregulatoryenviron-ment.Thescoresandrankingsofeacheconomyvaryconsiderablyacrosstopics,indicatingthatastrongperfor-mancebyaneconomyinoneareaofregulationcan coexistwithweakperfor-manceinanother(figure2.1).Onewaytoassessthevariabilityofaneconomy’sregulatoryperformanceistolookatitsscoresacrosstopics(seethecountrytables).Qatar,forexample,hasanoveralleaseofdoingbusinessscoreof65.89,meaningthatitisabouttwo-thirdsofthewayfromtheworsttothebestperformance.Itscoreshighlyat99.44 SomeDoingBusinessindicatorsgiveahigherscoreformoreregulationand better-functioninginstitutions(suchascourtsorcreditbureaus).Higherscoresaregivenforstricterdisclosurerequirementsforrelated-partytrans-actions,forexample,intheareaofprotectingminorityinvestors.Higherscoresarealsogivenforasimplified Theeaseofdoingbusinessscoreandeaseofdoingbusinessranking Toprovidedifferentperspectivesonthedata,DoingBusinesspresentsdatabothforindividualindicatorsandfortwoaggregatemeasures:theeaseofdoingbusinessscoreandtheeaseof wayofapplyingregulationthatkeeps onpayingtaxes,87.67onstartinga doingbusinessranking.Theeaseof

28. 24 DOINGBUSINESS2019 Averageofthethreehighestscores 0 businessorprotectingminorityinves- tors.GiventhatDoingBusinessmeasuresonlyafewfeaturesofeachareathatitcovers,businessregulatoryreformsshouldnotfocusonlyonthesenarrowareasandshouldbeevaluatedwithina broaderperspective. not,forexample,captureaspectsofmacroeconomicstability,developmentof thefinancial system,marketsize,theincidenceofbriberyandcorruptionorthequalityofthelaborforce. businessand83.27onregisteringprop-erty.Atthesametime,ithasascoreof 28.33forprotectingminorityinvestors, 38.12forresolvinginsolvencyand40forgetting credit. Thefocusisdeliberatelynarrowevenwithintherelativelysmallsetofindi-catorsincludedinDoingBusiness.Thetimeandcostrequiredforthelogisticalprocessofexportingandimportinggoodsiscapturedinthetradingacrossbordersindicators,forexample,buttheydonotmeasurethecostoftariffsorofinternationaltransport.DoingBusinessprovidesanarrowperspectiveontheinfrastructurechallengesthatfirmsface,particularlyinthedevelopingworld,throughtheseindicators. Itdoesnotaddresstheextenttowhichinadequateroads,rail,portsandcommunicationsmayaddtofirms’costsandunderminecompetitiveness(excepttotheextentthatthetradingacrossbordersindica- torsindirectlymeasurethequalityofportsandborderconnections).Similartotheindicatorsontrading acrossborders,allaspectsofcommerciallegislation FACTORSDOINGBUSINESS DOESNOTMEASURE Doing Businessdoesnotattempttoquan-tifyallcostsandbenefitsofaparticularlaworregulationtosocietyasawhole.Thepayingtaxesindicatorsmeasurethetotaltaxandcontributionrate,which,inisolation,isacosttobusinesses.However,theindicatorsdonotmeasure—noraretheyintendedtomeasure—thebenefitsofthesocialandeconomicprogramsfundedwithtaxrevenues.Measuringthequalityandefficiencyofbusinessregu-lationprovidesonlyoneinputintothedebateontheregulatoryburdenassoci-atedwithachievingregulatoryobjectives,whichcandifferacrosseconomies.Doing Businessprovidesastartingpoint for thisdiscussionandshouldbeusedinconjunc-tionwithadditionaldatasources.OtherWorldBankGroupdatabasesthatprovide comprehensivedatarelatedtosome Manyimportantpolicyareasarenot coveredbyDoingBusiness;evenwithintheareasitcoversitsscopeisnarrow(table2.2).DoingBusinessdoesnotmeasurethefullrangeoffactors,policiesandinstitutionsthataffectthequalityofaneconomy’sbusinessenvironmentoritsnationalcompetitiveness.Itdoes areasofDoingBusinessinclude:Women, arenotcoveredbythoseonstartinga

29. ABOUT DOINGBUSINESS 25 encouragedtoventureintobusinesswhenpotentiallossesarelimitedtotheircapitalparticipation. economy.Therealityisthatbusinessregu-lationsandtheirenforcementmaydifferwithinacountry,particularlyinfederalstatesandlargeeconomies.Butgath-eringdataforeveryrelevantjurisdictionineachofthe190economiescovered byDoingBusinessisinfeasible.Nevertheless,wherepolicymakersareinterestedingeneratingdataatthelocallevel, beyondthelargestbusinesscity,andlearningfromlocalgoodpractices,DoingBusinesshascomplementeditsglobalindicatorswithsubnationalstudies(box2.1).Also,coveragewasextendedtothesecondlargestbusinesscityineconomieswithapopulationofmorethan100million(asof2013)inDoingBusiness2015. BusinessandtheLaw,whichmeasureslegalrestrictionsonwomen’seconomicopportunitiesin189economies;theLogisticPerformanceIndex,whichbenchmarkstheperformanceoftradelogisticsin160economies;theWorldGovernanceIndicators,whichprovidesdataondifferentdimensionsofgover-nancein214economies;andCountryPolicyandInstitutionalAssessments,whichmeasurethequalityofpoliciesandinstitutionsinInternationalDevelopmentAssociation(IDA)economies.5 Another assumptionunderlyingtheDoingBusinessindicatorsisthatentre-preneurshaveknowledgeofandcomplywithapplicableregulations.Inpractice, entrepreneursmay not beawareof whatneedsto bedoneorhowto complywithregulationsandmayloseconsiderabletimetryingtofindout.Alternatively,theymayintentionallyavoidcompliance—bynotregisteringforsocial security,forexample.Firmsmayoptforbriberyandotherinformalarrangementsintendedtobypasstheruleswhereregulationisparticularlyonerous—anaspectthathelpsexplaindifferencesbetweenthedejuredataprovidedbyDoingBusinessandthedefactoinsightsofferedbytheWorldBankEnterpriseSurveys.6Levelsofinformalitytendtobehigherineconomieswithparticularlyburdensomeregulation.Comparedwiththeirformalsectorcounterparts,firmsintheinformalsectortypicallygrowmoreslowly,havepooreraccesstocreditandemployfewerworkers—andtheseworkers remainoutsidetheprotectionsoflaborlawand,moregenerally,otherlegalprotec-tionsembeddedinthelaw.7Firmsintheinformalsectorarealso lesslikely topaytaxes.DoingBusinessmeasuresonesetoffactorsthathelpexplaintheoccur-renceofinformalityandprovidespolicymakerswithinsightsintopotentialareasofregulatoryreform. ADVANTAGESAND LIMITATIONSOFTHEMETHODOLOGY TheDoingBusinessmethodologyisdesignedtobeaneasilyreplicablewaytobenchmarkspecificcharacteristicsofbusinessregulation—howtheyareimplementedbygovernmentsandexpe-riencedbyprivatefirmsontheground.Itsadvantagesandlimitationsshouldbeunderstoodwhenusingthedata(table2.3). DoingBusinessrecognizesthelimi- tationsofthestandardizedcasescenariosandassumptions.Butwhilesuch assumptionscome attheexpenseofgenerality,theyalsohelptoensurethecomparabilityofdata.SomeDoing Businesstopicsarecomplex, andso itisimportantthatthestandardizedcasesaredefinedcarefully.Forexample,thestandardizedcasescenariousuallyinvolvesalimitedliabilitycompanyoritslegalequivalent.Therearetworeasonsforthisassumption.First,privatelimitedliabilitycompaniesarethemostprevalentbusinessform(forfirmswithmorethanoneowner)inmanyeconomiesaroundtheworld.Second,thischoice reflectsthefocusofDoingBusinessonexpanding opportuni-tiesforentrepreneurship:investorsare EnsuringcomparabilityofthedataacrossaglobalsetofeconomiesisacentralconsiderationfortheDoingBusinessindicators,whichare developedusingstandardizedcasescenarioswithspecificassumptions.Onesuchassumptionisthelocationofastandardizedbusiness—thesubjectoftheDoingBusinesscase study—inthe largest businesscityofthe a.Ineconomieswithapopulationofmorethan100millionasof2013,DoingBusinesscoversbusinessregulationinboththelargestandsecondlargestbusinesscity.

30. 26 DOINGBUSINESS2019 BOX2.1SubnationalDoingBusinessindicators:theEuropeanUnionseries DoingBusinessintheEuropeanUnionis aseriesofsubnationalreportsbeingproducedbytheWorldBankGroupattherequestofandfundedbytheEuropeanCommission’sDirectorate-GeneralforRegionalandUrbanPolicy(DGREGIO).Afirstedi-tion,covering22citiesinBulgaria,HungaryandRomania,wasreleasedin2017.Thisyear,25morecitiesinCroatia,the CzechRepublic, PortugalandtheSlovakRepublic werebenchmarked (see map).Thenextstudyinthesubnationalserieswillcover 24citiesinGreece,IrelandandItaly.Theambitionistocontinuethisseriesuntilallmemberstateswithatleast4millioninhabitantshavebeencovered.Thefocusof the seriesisonindicatorsetsthatmeasure the complexityandcostofregulatory processes aswellasthestrength oflegalinstitutions,affectingfivestagesinthelifeofasmalltomedium-sizedomesticfirm:startingabusi-ness, dealingwithconstructionpermits,gettingelectricity, registeringpropertyandenforcingcontractsthrough a localcourt. Becausemanyregulationsandadministrativemeasuresareimplementedordeterminedbylocalauthorities,subnationalDoing Businessstudiesgiveanuancedandcomprehensiverepresentationofthebusinessregulatorysystemandtheefficacyofthebureaucracyatthelocaladministrativeunitlevel.Byprovidingafactualbaseline,alongwithlocalexamplesofgoodpractices,thestudiespromotepeerlearning—bothwithinnationalboundariesandbeyond—andconvergenceamonglocationstowardregula-torygoodpractices. Theresultsarerevealing. Thestudiesshowthat thereremainsubstantialdifferencesinthebusinessenvironmentbothbetweenandwithinEUmemberstates.Andthesedifferencesmatter.AstudythatlookedatcitiesinItaly,Poland,RomaniaandSpainfoundthatfirmslocatedinplaceswithabetterbusinessenvironmenthaveastrongerperformanceinsales,employmentandproductivitygrowthaswell asininvestments.aReducingthe costforlocalfirmstodobusinesswouldenhancetheirefficiencyandcompetitivenessabroadandencourageinvestments,whicharecriticalfor regional growth.AEuropeanCommissionreportoncompetitivenessinlow-incomeandlow-growthregionsalsoemphasizestheneedtoimprovepublicadministrationandmakeproceduresmoretransparent.b Thefindingsof the studiesindicatehowreform-mindedofficials can maketangibleimprovementsbyreplicatinggoodpracticesalready existinginothercitiesintheircountry.Forexample, byadoptingallthegoodpracticesfoundatthesubnationallevel,allfour member statesbenchmarkedin2018wouldmovesubstantiallyclosertothe regulatorybestperformance. TheinsightsfromthesubnationalDoingBusinessintheEuropeanUnionserieswillberelevantfortheindividualcountryreportsproducedfortheEuropeanSemester(theEuropeanUnion’seconomicandfiscalpolicycoordinationframework)andfortheCohesionPolicy(the EU’smaininvestmentpolicy)andwillbecloselylinkedwith the EuropeanCommission’s “lagging regions”initiative,whichstudiesconstraintsto growthandinvestmentinthelow-incomeandlow-growthregionsofthe EuropeanUnion. Azores Madeira Faroleandothers2017. EuropeanCommission2017.

31. ABOUT DOINGBUSINESS 27 Extensiveconsultationswithmultiple contributorsareconductedbytheteamtominimizemeasurementerrorsfortherestofthedata.Forsomeindica- tors—forexample,thoseondealingwithconstructionpermits,enforcing contractsandresolvinginsolvency—thetimecomponentandpartofthecost component(wherefeeschedules arelacking)arebasedonactualpracticeratherthanthelawonthebooks.Thisintroducesadegreeofjudgmentbyrespondentsonwhatactualpracticelookslike.Whenrespondentsdisagree, thetimeindicatorsreportedbyDoing Businessrepresentthemedianvaluesofseveralresponsesgivenundertheassumptionsofthestandardizedcase. approximatelytwo-thirdsofthedataembeddedintheDoingBusinessindica-torsarebasedonareadingofthelaw.Inadditiontofillingout questionnaires,DoingBusinessrespondentssubmitreferencestotherelevantlaws,regu-lationsandfeeschedules.TheDoing Businessteamcollectsthetextsoftherelevantlawsandregulationsandchecksthequestionnaireresponsesforaccuracy.Theteamwillexaminethecivilprocedurecode,forexample,tocheckthemaximumnumberofadjournmentsinacommercialcourt dispute,andreadtheinsolvencycodetoidentifyifthedebtorcaninitiateliquidationorreorganizationproceed-ings.TheseandothertypesoflawsareavailableontheDoingBusinesslawlibrarywebsite.8Sincethedatacollec-tionprocess involvesanannualupdateofanestablisheddatabase,havingaverylargesampleofrespondentsisnotstrictlynecessary.Inprinciple,theroleofthecontributorsislargelyadvi-sory—helpingtheDoingBusinessteamtolocateandunderstandthelawsandregulations.Therearequicklydimin- ishingreturnstoanexpandedpoolofcontributors.Thisnotwithstanding,thenumberofcontributorsroseby70%between 2010and2018. DATACOLLECTIONINPRACTICE TheDoingBusinessdataarebasedonadetailedreadingofdomesticlaws,regu-lationsandadministrativerequirementsaswellastheirimplementationinprac-ticeasexperiencedbyprivatefirms.Thereportcovers190economies—includingsomeofthesmallestandpooresteconomies,forwhichlittleornodataareavailablefromothersources.Thedataarecollectedthroughseveralroundsofcommunicationwithexpertrespondents(both private sectorpractitionersandgovernmentofficials),through responsestoquestionnaires,conferencecalls, writtencorrespondenceandvisitsbytheteam.DoingBusinessreliesonfourmainsourcesof information:therelevantlawsandregulations,DoingBusinessrespon-dents,thegovernmentsoftheeconomiescoveredandtheWorldBankGroupregionalstaff(figure2.2).ForadetailedexplanationoftheDoingBusinessmeth-odology,seethedatanotesathttp://www.doingbusiness.org. DoingBusinessrespondentsMorethan43,800professionalsin190economieshaveassistedinprovidingthedatathatinformtheDoingBusinessindicatorsoverthepast16years.9Thisyear’sreportdrawsontheinputsofmorethan13,800professionals.10TheDoing Businesswebsiteshowsthenumberofrespondentsforeacheconomyandeachindicatorset. Relevantlawsandregulations TheDoingBusinessindicatorsarebasedmostlyonlawsandregulations: Selectedonthebasisoftheirexper- tiseintheseareas,respondentsare FIGURE2.2HowDoingBusinesscollectsandverifiesthedata Nov.Dec.Jan.Feb.Mar.Apr. May Jun. Jul. Aug. Sept. Oct. Datacollectionandanalysis Questionnairedevelopment Report launch • TheDoingBusinessteamdistributesthequestionnairesandanalyzestherelevantlawsandregulationsalongwiththeinformationinthequestionnaires. • TheDoingBusinessteamtravelstoapproximately30economies. • TheDoingBusinessteamengagesinconferencecalls,videoconferencesandin-personmeetingswithgovernmentofficialsandprivatesectorpractitioners. • Governmentsand WorldBankGroupregionalteamssubmitinformationonregulatorychangesthatcould Dataverification • Thereportispublished,followedbymediaoutreachandfindings dissemination. • TheDoingBusinessteamupdates thequestionnairesandconsultswithinternalandexternalexperts. • TheDoingBusinessteamsharespreliminaryinformationonreformswithWorldBankGroupregionalteamsfortheirfeedback. • TheDoingBusinessteamanalyzesthedataandwritesthereport.CommentsonthereportanddataarereceivedfromacrosstheWorldBankGroupthroughaninternalreviewprocess. potentiallybeincludedintheglobalcountofregulatoryreforms.

32. 28 DOINGBUSINESS2019 Dataadjustments InformationondatacorrectionsisprovidedinthedatanotesavailableattheDoingBusinesswebsite.Atransparentcomplaintprocedureallowsanyonetochallengethe data.FromNovember2017toOctober2018theteamreceivedandrespondedtoover150queriesonthedata. DoingBusinessofferspolicymakersabenchmarkingtoolusefulinstimulatingpolicydebate. toassesstheprocessofstartingabusi-ness thanareindividualfirms.Theyalsohaveaccesstocurrentregulationsandpractices,whileafirmmayhavefacedadifferentsetofrules when incorporatingyearsbefore.ThesecondreasonisthattheDoingBusinessquestionnairesmostlygatherlegalinformation,whichfirmsareunlikelytobefullyfamiliarwith.Forexample,fewfirmswillknowaboutallthemainlegalproceduresinvolvedinresolvingacommercialdisputethroughthecourts,eveniftheyhavegonethroughtheprocessthemselves.Butalitigationlawyershouldhavelittle difficultyinprovidingtherequestedinformationonalltheprocedures. professionalswhoroutinelyadmin-isteroradviseonthelegalandregulatoryrequirementsinthespecificareascoveredbyDoingBusiness.Becauseofthefocusonlegal andregulatoryarrangements,mostoftherespondentsarelegalprofessionalssuchaslawyers,judgesornotaries.Inaddition,officialsofthecreditbureauorregistrycompletethecreditinformationquestionnaire.Accountants,architects,engineers,freightforwardersandotherprofes-sionalsanswerthequestionnairesrelatedtopayingtaxes,dealingwithconstruc- tionpermits,tradingacrossbordersandgettingelectricity.Informationthatisincorporatedintotheindicatorsisalsoprovidedbycertainpublicofficials(such as registrarsfromthecompanyorproperty registry). USESOFTHEDOING BUSINESSDATA Doing Businesswasdesignedwithtwomaintypesofusersinmind:policymakersandresearchers.Itisatoolthatgovern-mentscanusetodesignsoundbusinessregulatorypolicies.Nevertheless,theDoingBusinessdataarelimitedinscopeandshouldbecomplementedwithothersourcesofinformation.DoingBusinessfocusesonafewspecificrulesrelevanttothespecificcasestudiesanalyzed.Theserulesandcasestudiesarechosentobeillustrativeofthebusinessregulatoryenvironment,buttheyarenotacompre-hensivedescriptionofthatenvironment.Byprovidingauniquedatasetthatenablesanalysisaimedatbetterunder-standingtheroleofbusinessregulationineconomic development, DoingBusinessis alsoanimportantsourceofinformationforresearchers. GovernmentsandWorldBankGroupregionalstaff Afterreceivingthecompleted ques- tionnairesfromtheDoingBusinessrespondents,verifyingtheinformationagainstthe lawandconductingfollow-upinquiriestoensurethatallrelevantinformationiscaptured,theDoing BusinessteamsharesthepreliminarydescriptionsofregulatoryreformswiththeCountryManagementUnits(CMUs)oftheWorldBankGroupindifferentregions.Atalaterstage,theteamsendsthefinalversionsofthereformdescriptionstotheWorldBankGroup’sBoardofExecutiveDirectors,whichtheninformsthegovernmentsofthereformsintheireconomies. Throughthisprocess,governmentauthoritiesandWorldBankGroupstaffworkingontheeconomiescoveredbyDoingBusinesscanalerttheteamabout,forexample,regulatoryreformsnotreportedbytherespondentsoradditionalachievementsofregulatoryreforms. Inaddition,theteamrespondsformallytothecommentsofgovern-mentsorregionalstaffandprovides TheDoingBusinessapproachistoworkwithlegalpractitionersorotherprofes-sionalswhoregularlyundertakethetransactionsinvolved.Followingthestandardmethodologicalapproachfortime-and-motionstudies,DoingBusinessbreaksdowneachprocessortransac-tion,suchasstartingabusinessorregisteringabuilding,intoseparatestepstoensureabetterestimateoftime.Thetimeestimateforeachstepisgivenbypractitionerswithsignificantandroutineexperience in thetransaction. GovernmentsandpolicymakersDoingBusinessofferspolicymakersabenchmarkingtoolusefulinstimulatingpolicydebate,bothbyexposingpotentialchallengesandbyidentifyinggoodprac-ticesandlessonslearned.Despitethenarrowfocusoftheindicators,theinitialdebateinaneconomyontheresultstheyhighlighttypicallyturnsintoadeeperdiscussiononareaswherebusinessregu-latoryreformisneeded,includingareaswellbeyondthosemeasuredbyDoing Business.Ineconomieswheresubnationalstudiesareconducted,theDoingBusinessindicatorsgoonestepfurtherinoffering policymakersatooltoidentify goodpracticesthatcanbeadoptedwithintheir TherearetwomainreasonsthatDoing Businessdoesnotsurveyfirms.The firstrelatestothefrequencywithwhichfirmsengageinthetransactionscapturedbytheindicators,whichisgenerallylow.Forexample,afirmgoesthroughthestart-upprocessonce initsexistence,whileanincorporationlawyermaycarryout10suchtransactionseachmonth.Theincorporationlawyersandotherexpertsprovidinginformationto DoingBusinessarethereforebetterable explanationsofthescoringdecisions. economies(seebox2.1).

33. ABOUT DOINGBUSINESS 29 havebeeninformedbyDoing Business since 2003.11 OverthepastdecadegovernmentshaveincreasinglyturnedtoDoingBusinessasarepositoryofactionable,objectivedataprovidinguniqueinsightsintogoodprac-ticesworldwideastheyhavecometounderstandtheimportanceofbusinessregulationasa drivingforce ofcompeti-tiveness.Toensurethecoordinationofeffortsacrossagencies,economiessuchasColombia,MalaysiaandtheRussianFederationhaveformedregulatoryreformcommittees.ThesecommitteesusetheDoingBusinessindicatorsasoneinputtoinformtheirprogramsforimprovingthebusinessenvironment.Morethan70othereconomieshavealsoformedsuchcommittees.InEastAsiaandthe Pacific, theyincludeBrunei Darussalam;Indonesia;theRepublicofKorea;Myanmar;thePhilippines;SriLanka;Taiwan,China;andThailand.IntheMiddleEastandNorthAfrica:Algeria,theArabRepublicofEgypt,Israel,Kuwait,Morocco,Qatar,SaudiArabiaandtheUnitedArabEmirates.InSouthAsia:Afghanistan,Bangladesh,IndiaandPakistan.In EuropeandCentralAsia:Albania,Azerbaijan,Croatia,Georgia,Kazakhstan,Kosovo,theKyrgyzRepublic,theformerYugoslavRepublicofMacedonia,Moldova,Montenegro,Poland,Tajikistan,Turkey,Ukraineand Uzbekistan.InSub-SaharanAfrica:Benin,Burundi,theComoros,theDemocraticRepublicofCongo,theRepublicofCongo,Côted’Ivoire,Guinea,Guinea-Bissau,Kenya,Liberia, Madagascar,Malawi,Mali,Mauritius,Niger,Nigeria,Rwanda,Senegal,SierraLeone,Sudan,Tanzania,Togo,ZambiaandZimbabwe.AndinLatinAmericaandtheCaribbean:Argentina,Brazil,Chile,CostaRica,theDominicanRepublic,Guatemala,Jamaica,Mexico,Nicaragua,Panama,PeruandSt.Lucia.Governmentshavereportedmorethan3,500 regulatoryreforms,1,116 ofwhich ManyDoingBusinessindicatorscanbeconsidered“actionable.”Forexample,governmentscansettheminimumcapitalrequirementfornewfirms,investincompanyandpropertyregistriestoincreasetheirefficiency,orimprovetheefficiencyoftaxadministrationby adoptingthelatesttechnologytofacili-tatethepreparation,filingandpaymentoftaxesbythebusinesscommunity.Andtheycanundertakecourtreformstoshortendelaysintheenforcementofcontracts.ButsomeDoingBusinessindicatorscaptureprocedures,timeandcoststhatinvolveprivatesectorparticipants,suchaslawyers,nota-ries,architects,electriciansorfreightforwarders.Governmentsmayhavelittleinfluenceintheshortrunoverthefeestheseprofessionscharge,thoughmuchcanbeachievedbystrengtheningprofessionallicensingregimesandpreventinganticompetitivebehavior.Andgovernmentshavenocontroloverthegeographiclocationoftheireconomy,afactorthatcanadverselyaffectbusinesses. ManyeconomiesshareknowledgeontheregulatoryreformprocessrelatedtotheareasmeasuredbyDoingBusiness. Amongthemostcommonvenuesforthisknowledgesharingarepeer-to-peerlearningevents—workshopswhereoffi-cialsfromdifferentgovernmentsacrossaregionorevenacrosstheglobemeettodiscussthechallengesofregulatoryreformandtosharetheirexperiences. Researchers DoingBusinessdataarewidelyusedbyresearchersinacademia,thinktanks,internationalorganizations andotherinstitutions.Since2003,thousandsofresearchershaveutilized DoingBusinessdataoritsconceptualframeworktoanalyzetheimpactofbusinessregula-tiononvariouseconomicoutcomes.Thissectionprovidesabriefoverviewofstudiespublishedinthetop100jour-nalsduringthelast10years orrecentlydistributedasaworkingpaperofawell- establishedinstitution.12ThepaperscitedherearejustafewexamplesofresearchdoneintheareasmeasuredbyDoingBusiness.13AcomprehensivereviewoftheliteratureisprovidedintheresearchchaptersofDoingBusiness2014andDoingBusiness2015. WhilemanyDoingBusinessindicatorsareactionable,thisdoesnotnecessarilymeanthattheyareall“action-worthy”inaparticularcontext.Businessregulatoryreformsareonlyoneelementofastrategyaimedatimprovingcompetitivenessandestablishingasolidfoundationforsustainable economic growth.Therearemanyotherimportantgoalsto pursue—suchaseffectivemanagementofpublicfinances,adequateattentiontoeduca- tionandtraining,adoptionofthelatesttechnologiestoboosteconomicproduc- tivityandthequalityofpublicservices,andappropriateregardfor air andwaterqualitytosafeguardpublichealth.Governmentsmustdecidewhatsetofprioritiesbestsuitstheirneeds.Tosaythatgovernmentsshouldworktowardasensiblesetofrulesforprivatesectoractivity(asembodied, forexample,intheDoingBusinessindicators)doesnotsuggestthatdoingsoshouldcomeattheexpenseofotherworthy Regulationoffirmentryisoneofthemostinvestigatedareasofbusinessregulation.Theresultsofthisbodyofresearchsuggestthatexcessiveregula-tionofentryincreasesthenumberofinformalbusinessesandemployment.AnaturalexperimentalstudyinMexicofoundthatreformsthatsimplifiedbusi-nessregistrationincreasedregistrationby5%andwageemploymentby2.2%.14Thesereformsalsoresultedin14.9%ofinformalbusinessownersshiftingtothe ThousandsofresearchershaveutilizedDoingBusinessdataoritsconceptualframeworktoanalyzetheimpactofbusinessregulationonvariouseconomicoutcomes. policygoals.

34. 30 DOINGBUSINESS2019 environmentarepositivelylinkedtoexportperformance.21Accordingtoastudy,a1-dayincreaseintransittimereducesexportsbyanaverageof7%inSub-SaharanAfrica.22Anotherstudyfoundthata1-daydelayintransporttimeforlandlockedeconomiesandfortime-sensitiveagriculturalandmanufacturingproductsreducetradebymorethan1%foreachdayofdelay.23Delaysincustomsclearancealsonegativelyimpactafirm’sabilitytoexport,particularly when goodsaredestinedfornewclients.24Inecono-mieswithflexible entry regulations,a1%increaseintradeisassociatedwithanincreaseofmorethan0.5%inincomepercapitabuthasnopositive income effectsineconomieswithmorerigidregulation.25Researchhasalsoshownthatpotentialgainsforconsumersfromimportcompe-titionarereducedin economieswithcumbersomeregulation.26 maindriversbehind“missing”corporatebond marketsinmanyeconomies.32 formaleconomy.15InPortugal,reformsreducingthetimeandcostforcompanyformalizationincreasedthenumberofbusinessstart-upsby17%andcreatedsevennewjobsper100,000inhabit-antspermonth.Thesenewstart-upsweremorelikelytobefemale-owned,weresmallerandheadedbylessexperi-encedandless-educatedentrepreneurscomparedtoothers,suggestingthatthereform createdamore inclusiveenviron-mentforaspiringentrepreneurs.16 Moreborrowersgainaccesstocreditineconomieswitharobustlegalsystemthatsupports theuse ofmovableassetsascollateral andawell-developed creditinformationsharingsystem.Inamulti-economystudy,theintroductionofcollateralregistriesformovableassetswasshowntoincreasefirms’accesstofinancebyapproximately8%.33Creditors’ ability tousemovableassets,vis-à-visrealestate,isshowntoincreasethe debtcapacityoffirms.34Anin-depthreviewofglobalbankflowsrevealedthatfirmsineconomieswithbettercreditinformationsharingsystemsandhigherbranchpenetrationevadetaxestoalesser degree.35 Efficientandnon-distortionarybusinessregulationsarecrucialforproductivity.AstudyonIndia,forexample,showsthatinefficientlicensingandsizerestrictionscauseamisallocationofresources,reducingtotalfactorproduc-tivity(TFP)bypreventingefficientfirmsfromachievingtheiroptimalscaleand allowinginefficientfirmstoremaininthemarket.17ThestudyconcludesthatremovingtheserestrictionswouldboostTFPby40-60%.IntheEuropeanUnionandJapan,implicittaxesoncapitalusewereshowntoreducetheaveragesizeoffirmsby20%,outputby8.1%andoutputperfirmby25.6%.18Arecentstudyon Côted’Ivoire,Ethiopia,GhanaandKenyademonstrateslargeproductivitygainsfollowingtheremovaloffirm-leveldistor-tionscausedbyunevenregulationsandapoorbusinessenvironment.19ResearchalsoshowsthatraisingtheefficiencylevelofbankruptcylawsinselectOECDhigh-incomeeconomiestothatoftheUnitedStateswouldincreasetheTFPoftheformerbyabout30%throughariseinbankloanstolargefirms.20 Thereisalsoalargebodyofworkinves-tigatingthedistortionaryeffectsof hightaxratesandcumbersometaxcodesandprocedures.AfterataxreforminBrazil,businesslicensingamongretail firmsroseby13%.36Researchshowsthata10%reductionintaxcomplexityiscomparabletoa1%reductionineffec-tive corporatetaxrates37andhighertaxratesdiscourageentry.38Arecentstudyfindsthatalowertaxcomplianceburdenhasapositiveimpactontheproductivityofsmalland youngfirms.39 EventhoughDoingBusinessmeasuresaspectsofbusinessregulationaffectingdomestic firms,severalstudiesindi-catethatbetterbusinessregulationisassociatedwithhigherlevelsofFDI.27Also,theimpactofFDIondomestic investmentdependsonhowbusiness-friendlyentryregulationsareinthehosteconomy.AstudyshowsthatFDIcancrowdoutdomesticinvestmentineconomieswithcostlyprocessesforstartingabusiness.28Anotherstudypoints out thateconomieswithsimplerprocessesforstartingabusinesshavehigherinternationalmarketintegrationonaverage.29 Labormarketregulation—asmeasuredbyDoingBusiness—hasbeenshowntohaveimportantimplicationsforeconomies. Accordingtoonestudy,graduatingfromschoolduringatimeofadverseeconomicconditionshasapersistent,harmfuleffectonworkers’subsequentemploymentopportunities.Thepersistenceofthisnegativeeffectisstrongerineconomieswithstricteremploymentprotectionlegislation.40 Rigidemploymentprotectionlegislationcanalsohavenegativedistributional consequences.Astudyanalyzingthelabormarketregulationliteraturepointsoutthattheimpactoflabormarketregu- lationonproductivitycouldbeineither A well-designedinsolvencyframeworkisavitaldeterminantofdebtrecovery.AreformmakingbankruptcylawsmoreefficientinColombia,forexample,improvedtherecoveryrateofviablefirmssignificantly.30InIndiatheestablishmentofdebtrecoverytribunalsreducednon-performingloansby28%andloweredinterestratesonlargerloans,suggestingthatfasterprocessingofdebtrecoverycasescutthecostofcredit.31ArecentstudyusingDoingBusinessdatashowed Inmanyeconomies,companiesengagedininternationaltradestrugglewithhightradecostsarisingfromtransport,logis- ticsandregulationsthatimpedetheir competitivenessandgrowth potential.WiththeDoingBusinessindicatorsontradingacrossborders,severalempiricalstudieshaveassessedhowtradecostsaffecttheexportandimportperfor-manceofeconomies.Arichbodyofempiricalresearchshowsthatefficient infrastructureandahealthybusiness direction,andthemagnitudeofthe thatinsolvencyresolutionisoneofthe

35. ABOUT DOINGBUSINESS 31 impactismodest.Thestudyprovidesclear evidencethatlabor marketregula- tionequalizestheincomeofthecoveredworkers,butyouth,womenandless-skilledworkersgenerallyareleftoutsidethiscoverage and thebenefits.41 sampleof190economiesduringtheDoingBusiness2020reportcycle,whentheindicatorswillbeconsidered forinclusionin theDoingBusinessrankings. WHATISNEXT? TheDoingBusinessteamisdevelopinganewindicatorset—contractingwiththegovernment—thatbenchmarkstheefficiency,quality,transparency,account-abilityandintegrityofpublicprocurementsystemsaroundtheworld.Publicprocurementreferstotheprocessbywhichpublicauthoritiespurchasegoodsorservicesfromfirms.Globally,publicprocurementaccountsforbetween10and25%ofGDPonaverage,withgovern-ments cumulatively spendingabout$9.5trillioninpubliccontractseveryyear.Thegovernmentisthebiggestbuyeronmanynationalmarketsandthepolicyissuesendorsedthroughpublicprocure-mentcanbeacatalystforeconomicdevelopment,innovation,employmentandgrowth.Inefficientpublicprocure-ment,ontheotherhand,isextremely costly.Itcompromisescompetition,thusraisingthepricespaidbygovernmentsforgoodsandservices.Also,giventhemagnitudeoftheresourcesinvolved,theuniquepurchasingpowerofgovern-ments,themultitudeofstakeholdersandthecomplexityofprocesses,publicprocurementisparticularlyvulnerabletofraudandcorruption.IntheEuropeanUnionalone,annuallossesduetocorrup-tioninpublicprocurementcouldequalapproximately€5billion($5.7billion),higherthantheGDPofmorethan30%ofSub-SaharanAfricaneconomies.44 DoingBusinessrecognizesthatthecomparabilityofdataovertimeisvital forbothresearchersandpolicymakers.Theteamhasnot,therefore,madeanymethodologicalchangesinthisyear’sdata.Thisdecision isalsosupportedbythe DoingBusinessExternalAuditReport2018,whichcanbeaccessedathttp://www.doingbusiness.org/. Indexes DoingBusinessidentified20differentdataprojectsorindexesthatuseDoing Businessasoneofitssourcesofdata.42Mostoftheseprojectsorinstitu-tionsuseindicatorleveldataandnottheaggregateeaseofdoingbusinessranking.Theindicatorsetmostwidelyusedisstartingabusiness,followedbylabormarketregulationandpayingtaxes.TheseindexestypicallycombineDoingBusinessdatawithdatafromothersourcestoassessaneconomy alongaparticularaggregatedimensionsuchascompetitivenessorinnova-tion.TheHeritageFoundation’sIndexofEconomicFreedom,forexample,hasused22DoingBusinessindicators tomeasurethedegreeofeconomicfreedomin theworldinfourareas,includingruleoflaw,governmentsize,regulatoryefficiencyandmarketopen- ness.43Economiesthatscorebetterinthesefourareasalsotendtohavea highdegreeofeconomicfreedom. NOTES Djankov 2016. Thesepapers areavailableontheDoingBusinesswebsiteathttp://www .doingbusiness.org/methodology. FormoreontheWorld Bank EnterpriseSurveys,seethewebsiteathttp://www .enterprisesurveys.org. Forgettingcredit,indicators areweightedproportionally,accordingtotheircontributiontothetotalscore,withaweightof60%assignedtothestrengthoflegalrightsindexand40%tothedepthofcreditinformationindex.Inthisway,eachpointincludedintheseindexeshasthesamevalueindependentofthecomponentitbelongsto.Indicatorsfor allothertopics areassignedequalweights.Formoredetails,seethechapterontheeaseofdoingbusinessscoreandeaseofdoingbusinessrankingavailableathttp://www .doingbusiness.org. Formoreinformationonthesedatabases,seetheirwebsites:Women, BusinessandtheLaw(https://wbl.worldbank.org/);LogisticPerformanceIndex (https://lpi.worldbank.org/);WorldGovernanceIndicators(http:// info.worldbank.org/governance/wgi/#home);CountryPolicyandInstitutionalAssessments(https://datacatalog.worldbank.org/dataset /country-policy-and-institutional -assessment). Hallward-DriemeierandPritchett2015. Schneider2005;LaPortaandShleifer2008. Forthelawlibrary,seethewebsiteathttp://www.doingbusiness.org/law-library. Theannualdatacollection exerciseisanupdateofthedatabase.TheDoingBusinessteam andthecontributors examinetheextenttowhichtheregulatoryframeworkhaschangedinwaysrelevantforthefeatures capturedbytheindicators.Thedatacollectionprocessshouldthereforebeseenasaddingeachyeartoan existingstockofknowledgereflectedinthepreviousyear’sreport,notascreatinganentirelynewdataset. Similarly,theWorldEconomicForumusesDoingBusinessdatainitsGlobal CompetitivenessIndextodemonstratehowcompetitivenessisaglobaldriverofeconomicgrowth.Theorganizationalsouses13DoingBusinessindicatorsin fiveindexesthatmeasureinstitutions,productmarketefficiency,labormarketefficiency,financialmarketdevelopmentandbusinessdynamism.ThesepubliclyaccessiblesourcesexpandthegeneralbusinessenvironmentdatageneratedbyDoingBusinessbyincorporatingitintothestudyofotherimportantsocialandeconomicissuesacrosseconomiesandregions.They prove that,takenindividu- ally,DoingBusinessindicatorsremainausefulstartingpointforarichbodyofanalysisacrossdifferentareasand Dataarecollectedusingaquestionnairethatfollowsthelifecycleofaprocure-ment contractintheroadinfrastructuresector.Thequestionnairewasbuilttoreflectinternationally-recognizedgoodpracticesinpublicprocurement,peer-reviewedandpilotedin18econo-miesinlate2017.Theteamisintheprocessofcollectingdataforapproxi-mately85economieswiththeaimofpublishingtheresultsintheDoing Businesswebsitebyearly2019along-sidethe indicatorset’spreliminarymethodology.Datacollectionwillthen 10.Whileabout13,800contributorsprovideddataforthisyear’sreport,manyofthemcompletedaquestionnaireformorethan dimensionsin the researchworld. bescaled-uptothefullDoingBusiness oneDoingBusinessindicatorset.Indeed,the

36. 32 DOINGBUSINESS2019 totalnumberofcontributionsreceivedforthisyear’sreportismorethan17,200,whichrepresentsatruemeasureoftheinputs received.Theaveragenumberofcontributionsperindicatorsetandeconomyismorethanseven. Formoredetails,seehttp://www .doingbusiness.org/contributors/doing -business. These arereformsforwhichDoingBusinessis awarethatinformationprovidedbyDoingBusinesswasusedinshapingthereformagenda. Thejournalandinstitutionrankings arefromResearchPapersinEconomics(RePEc)andcoverthelast10years.Theycanbeaccessedathttps://ideas.repec.org/top/top.journals .simple10.htmlandhttps://ideas.repec.org /top/top.inst.allbest10.html. Since2003, whentheDoingBusinessreportwasfirstpublished,morethan3,400researcharticlesdiscussinghowregulationinthe areasmeasuredbyDoingBusinessinfluenceeconomicoutcomeshavebeenpublishedinpeer-reviewedacademicjournalsand1,360ofthese arepublishedinthetop100journals.Another9,450 arepublishedasworkingpapers,books,reports,dissertationsorresearchnotes. Bruhn2011. Bruhn2013. Branstetterandothers2014. HsiehandKlenow2009. Guner,VenturaandXu2008. Cirera,FattalJaefandMaemir 2017. Neira 2017. Portugal-PerezandWilson2011. FreundandRocha2011. Djankov,FreundandPham2010. Martincus,CarballoandGraziano2015. FreundandBolaky2008. AmitiandKhandelwal2011. CorcoranandGillanders2015. Munemo2014. Norbäck,PerssonandDouhan2014. GinéandLove2010. Visaria2009. BeckerandJosephson 2016. Love,MartínezPeríaandSingh 2016. Calomirisandothers 2017. Beck,LinandMa2014. MonteiroandAssunção2012. Lawless2013. Belitski,ChowdhuryandDesai 2016. Dabla-Norrisandothers 2017. KawaguchiandMurao2014. Betcherman2015. TheprojectsorindexesusingDoingBusinessasasourceofdata arethefollowing:CitiandImperialCollegeLondon’sDigital MoneyIndex;CornellUniversityandtheWorld IntellectualPropertyOrganization’sGlobalInnovationIndex (GII);DHL’sGlobal ConnectednessIndex (GCI);FraserInstitute’sEconomicFreedomoftheWorld(EFW)index;HeritageFoundation’sIndex ofEconomicFreedom (IEF); INSEAD’sGlobalTalent CompetitivenessIndex (GTCI); InternationalInstituteforManagementDevelopment’sWorldCompetitivenessYearbook; KPMG’s ChangeReadinessIndex (CRI); Legatum MillenniumChallengeCorporation’sOpenDataCatalog;OxfordUniversity’s InternationalCivilServiceEffectiveness(InCiSE)Index;PricewaterhouseCoopers’PayingTaxes 2018:In-depthAnalysisonTax Systemsin 190 EconomiesReport;TRACE’sBriberyRiskMatrix;U.S.ChamberofCommerce’s GlobalRuleofLawandBusinessDashboard;UniversityofGothenburg’sQualityofGovernment(QoG)StandardDataset;andWorldEconomicForum’sEnablingTradeIndex (ETI),GlobalCompetitivenessIndex (GCI);HumanCapitalIndex (HCI),NetworkedReadinessIndex (NRI)andTravelandTourismCompetitivenessIndex (TTCI). FormoreontheHeritageFoundation’sIndex ofEconomicFreedom,seethewebsiteathttp://heritage.org/index. EuropeanParliament 2016. Institute’sLegatumProsperityIndex;

37. DOINGBUSINESS2019 Theroleoftraininginfacilitatingentrepreneurshipandpropertyrights StartingaBusinessandRegistering Property • This yearDoingBusinesscollecteddataontrainingprovided tobusinessandlandregistryofficersandusersin183economies. Bykeepingrecordsof acompany’sformalexistence andof land ownershiprights,businessandlandregistriesplayacriticalroleinanyeconomy’sbusinessenvironment.Registeringanewcompanyor apropertyrightisbestdone when registryofficersare welltrained andknowledgeable. Acombinationof targetedtrainingandeffective communicationto both civilservantsandthe publiccanimprove the overallqualityof the publicgoodsandservicesprovidedbybusiness andlandregistries. • Trainingopportunitiesatbusinessandlandregistriesareonlyprovidedinalimitednumberofeconomies. • Only24%oftheeconomiesmeasuredforthiscasestudylegallyrequire professionaltraining forbusinessregistryofficers. Forthefirst time this yearDoing Businesscollecteddataonthetrainingandcommu-nication of changesprovidedtoboththeofficersandtheusersofbusinessandlandregistries.Regardingregistryofficers,DoingBusinessresearchcoveredqualifi-cationrequirementsforcivilservants,themandatory trainingofofficers,thefrequencyanddurationoftrainingandhowchangesintheregistriesarecommu-nicatedtothem.Datawerealsocollectedontrainingforregistryusers,includingtheworkshopsofferedtonewbusinessownersandthetargetedcommunicationofregistrychanges tothegeneralpublic.Thiscasestudyexamineshowtraining contributestobusinessactivitybyimprovingthequalityofservicesprovidedbybusinessregistries(toentrepreneurs)andlandregistries(topropertyowners). Thesystematictrainingofregistryofficersis,therefore,vitalfor a well-func-tioningregistrysystemandtheeffectiveimplementationofgovernmentpoliciestopromoteentrepreneurship. • Mandatorytraining forbusinessregistryofficersisassociatedwithhigherbusinessregistryefficiency whileannualtraining forlandregistryofficersisalsoassociatedwithhigherlandregistryefficiency. Relevanceoftraininginbusinessandlandregistries Well-trainedstaffaremoreefficientandlesspronetomakingerrorswhenassessingtransactionsorassistingentrepreneurs. Businessregistrarstypicallyundertakeaseriesoftrainingprogramsandexaminationstogainthequalificationsrequiredtoperformtheirduties.TheCanadianprovinceofAlberta,forexample,requiresaspiringbusinessregistrarstocompletethreelevelsofexamstoreceivethehighestaccreditationfortheCorporateRegistryElectronicSystem.Topassthese exams,studentscompletethreeonlinecourses(costing365Canadiandollars—about $282—each)throughwhichtheylearnhowtoperformproceduressuchasregisteringlimitedliabilitypartnershipsandamendingcorporatestructures, • Communicationofchangesatthe businessandlandregistries—throughworkshops forregistryofficersanddisseminationcampaigns forregistryusers—isassociatedwithalower transactioncompletiontime. TRAININGREGISTRYOFFICERS Business andlandregistryofficers playakeyroleinfacilitatingthedeliveryofhigh- amongothers.1 qualityservicestonewentrepreneurs.

38. 34 DOINGBUSINESS2019 continuoustrainingforlandregistryofficersbepractical,availabletoallwhorequireitandrangefromuniver-sity-levelcoursesforcomprehensive professionaltrainingtoshort-termcoursesforthe introductionofnew techniques.5Landregistriesshouldprovidebothformalandin-housetrainingforemployeesandensurethatstaffhaveadequatetimetotakeadvantageoftrainingopportunities.6Trainingisessentialtoconveyregistryservicestandards(proceduraltimes,forexample)sothatstaffunderstandtheir dutiesandareequippedto handleproblems whenthey arise.7 Trainingregistryofficersaboutupcomingchanges isassociatedwithapositiveimpactonthebusinessoperatingenvironment. providetrainingtobusinessregistryofficers.Thecontentofthetrainingisdiverse,varyingfromtechnicalskills(legislativechanges,typesofentitiesand incorporationrequirements,ITskills)tosoftskills(professionalethics,commu-nication skills).InSpain,theProfessionalAssociationofRegistrarsoffersonlineand in-personcoursesfreeofchargeforregistryofficers.Topicsincludethelegalformsandcorporatestructureofacompanyandtheprocessesofregisteringordissolvingeachtypeofcompany,amongothers.4 Landregistrarsalsoplayafundamentalroleinguaranteeinglegalcertaintytopropertyrightstransactions.Toperformtheirdutieslocallandofficersneedarangeoftechnicalandcommunicationskillsthatcanbeattainedthroughstafftrainingprograms.2Mosteconomiesregulatethepositionoflandregistrar,typicallythroughminimumskilloreduca-tionrequirements.Ofthe183economiesincludedinthiscasestudy,74%requirethatlandregistrarsattainaminimumlevelofeducation(usuallyauniversitydegreeinlaw),47%requireaprofes-sionalqualificationand44%mandateaminimumnumberofyearsofexperi-ence.Only15%ofeconomiesrequireacombinationoffourcriteria—typicallyaminimumlevelofeducation,minimumyearsofexperience,professionalqualificationandbeingacivilservant. ProspectivelandregistrarsinBulgaria,forexample,musthaveauniversitydegreeinlaw,alicenseto practice law,evidence ofmoralintegrityandprofessionalstanding,norecordofintentionalcriminaloffenses,andthecandidatemustnotbeanelectedmemberofthe SupremeJudicialCouncil. Training should notbelimitedtomanagersandsupervisors.Landregistrystaffthatinteractwiththepubliconadailybasisshouldalsobewelltrained. Capacity-buildingtrainingprograms—suchasthatprovidedforthestaffofTurkey’slandand cadasteragencyin2018ortheworkshoponlandrecordsmanagementinThailandheldin2017—canbeimportantformaintainingthequalityoflandregistryservices.8 Slightlymorethanhalf of theeconomiesthatlegallymandatetrainingalsodefineaminimumfrequencyordurationofthattraining.InChinaandRomania,forexample,mandatorytrainingprogramsmustbeheldannually. Registrystafftypi-callymakedecisions on the durationandfrequencyoftrainingprograms. Although mosteconomiesdonotlegallyrequirecontinuoustraining,one-thirdofeconomiesmeasuredbythiscasestudyholdregulartrainingprogramson TheLandAdministrationGuidelinesfromtheUnited NationsEconomicCommissionforEuropesuggestthat FIGURE3.1 Mosteconomiesdonotlegallyrequiretrainingforbusinessregistryofficers Continuoustraininginbusinessandlandregistries Most economiesdonothavelegallybindingregulationthatmandatestrainingforbusinessregistryofficers(figure3.1).Indeed,just24%oftheeconomiesmeasuredforthiscasestudylegallyrequireprofessionaltrainingforbusinessregistryofficers.Suchrequirementsvarysignificantlyamongregions—nearlytwo-thirds(59%)ofeconomiesinEuropeandCentralAsiahavealegalrequirementfortraining,butonly11%ofeconomiesintheMiddleEastandNorthAfrica do.3Althoughgroupclassesarethemostcommonformoftraining,online learningtoolsareusedinabout5%of Trainingrequired 9% 24% 43% 27% 76% 21% Onlyminimumtime OnlyminimumfrequencyMinimumtimeandfrequencyNominimumtimeorfrequency TrainingnotrequiredTrainingrequired economieswithalegalrequirementto Source:DoingBusinessdatabase.

39. STARTINGABUSINESSAND REGISTERINGPROPERTY 35 avarietyoftopicsforlandregistryoffi-cials.Routinetrainingisofferedin45%ofOECDhigh-incomeeconomiesbutjust24%ofeconomiesinSub-SaharanAfrica.9Whilethetopicsofthesetrainingprogramsvary,theycommonlyincludeadministrativeprocesses(offeredin35%ofeconomieswithtraining),propertyrights(30%),newsystemsorinnova-tions(27%)andcustomerserviceand coordinationwithotheragenciessuchasthecadasterortaxauthority(22%). FIGURE3.2Economieswithtrainingprogramstendtoscorebetterthanthosewithout Scoreforstartingabusiness,registeringproperty (0–100) 100 90 80 70 60 Businessandlandregistryefficiencytendstobehigherineconomieswheretrainingisofferedtoregistrystaff.Economieswithmandatorytrainingforbusinessregistryofficershaveascoreforstartingabusinessthatis6pointshigheronaveragethanthosewithoutit(figure3.2).Furthermore,economieswithannualtrainingprogramsatthelandregistryhaveahigherscore(by7pointsonaverage) forregisteringpropertythaneconomieswithoutit. 50 Trainingatthebusinessregistry Trainingatthelandregistry YesNo Source:DoingBusinessdatabase. Note:Fortrainingatthebusinessregistry,thisrelationshipissignificantatthe1%levelaftercontrollingforincomepercapita.Fortrainingatthelandregistry,thisrelationshipissignificantatthe5%levelaftercontrollingforincomepercapita. Trainingregistryofficersaboutupcomingchangesisassociatedwith apositiveimpactonthebusinessoperatingenvi-ronment.DoingBusinessdataindicatethatittakes12dayslessonaveragetoincorporateabusinessand29dayslessonaveragetotransferapropertyin andEastAsiaandthePacificalsorunpilottestsbeforeimplementingnewprocesses.Pilottestingisusedin lessthan20%ofeconomiesinLatinAmericaandtheCaribbean,theMiddleEastandNorthAfrica,SouthAsiaandSub-SaharanAfrica. Communicatingchangestoregistryofficers Changestoregulationsorprocessesatbusinessandlandregistriescanbecommunicatedtostaffinvariousways.Atbusinessregistries,officerslearnaboutchangestothebusinessstart-upprocessthroughworkshopsin66%ofeconomies;in39%ofeconomiestheyareinformedviapilottests.Workshopsandpilottestsarealsothemostcommonmeansofinformingstaffofchangestoregulationsorprocessesatlandregis-tries;56%ofeconomiesmainlyuseworkshopsforthispurposewhile24%usepilottests(figure3.3). FIGURE3.3Workshopsarethemostcommonchannelforcommunicatingchangestoregistry Shareofeconomiesusingcommunicationchannel(%) 70 60 50 40 30 20 10 By usingpilottesting,businessandlandregistriescanidentifyandaddresspotentialchallengesbeforethefullimplementationofnewprocesses.PilottestsaremostcommonlyimplementedinregistriesinEuropeandCentralAsia,where55%ofbusinessregistriesand41% of landregistriesusepilottesting.Asignificantshareofregistries 0 Workshops Pilottests Dissemination campaigns Publicbroadcast Businessregistries Landregistries Source:DoingBusinessdatabase. Note:Aneconomycanusemultiplechannelsofcommunicationaslistedabove.Economieswherechangesarenotcommunicated(twoeconomies)areexcludedfromthesample.Workshopsrefertotheuseofpresentationsforagroupofpeople.Pilottestsrefertotheuseofsmall-scaleexperimentsorteststointroducechanges.Disseminationcampaignsrefertotheuseofsocialmediaorbillboards.Publicbroadcastreferstousingtelevisionorradio intheOECDhigh-incomeeconomies transmissiontoconveychanges.

40. 36 DOINGBUSINESS2019 of EETonbusinessgrowthsuchas,forexample, enhancingentrepreneurs’accesstocredit.12Training programsalsosucceededinteachingnewentrepreneursmanagerialskillsusefultotheopera-tionoftheirbusinesses.13Inaddition,business-supportinterventionsforsmallandmedium-sizeenterprisesliketrainingprogramshelpimprovefirmperformanceandcreatejobs.14However,dependingonthenationalcontextandontheaudi-encereceivingtheprogram,theimpactof trainingprogramscanvarywidely.AnexperimentinBosniaandHerzegovina,forexample,showedthatindividualswithanexistingbusinesstendtobenefitmorefromtrainingopportunitiesandmakemore investmentsthanindividualswithoutabusiness.15 economieswhereregistryofficershavereceivedtrainingcomparedtoeconomieswherenotrainingisoffered(figure3.4). Guatemala’sbusinessregistrymaintainsabudgetexplicitlydedicatedtotrainingsystemusers—theregistryhasanannualbudgetof70,000quetzales(about $10,000)specificallyfortrainingnota-riesandlawyers.Inrecent years the landregistryspent208,000quetzales(about $28,000)toprovidetrainingtomorethan3,000systemusers,mainlynotariesandlawyers. TRAININGREGISTRYUSERS Registryusersalsobenefitfromtraining.Asthepopularityofentrepreneurialtrainingprogramshasriseninrecentyearsgovernmentsworldwidehavetakenstepstodevelopandexpandsuchprograms. Skills trainingprogramsaremoresuccessfulwhentheprivatesectorisinvolvedincurriculumdevelopmentaswellasprovidingon-the-jobtrainingviainternshipsorapprenticeships.17Colombia’sJóvenesenAcciónprogram,forexample,combinesclassroominstruc-tionwithon-the-jobtrainingatprivate companies.Thismodel’sshort-termoutcomes—namelyahigherprobability offormalemploymentandgreaterearn-ings—weresustainedoverthelongterm. Relevanceoftrainingforentrepreneurs In 2014some230EntrepreneurshipEducationandTraining(ETT)programswereidentifiedaroundtheworld;theseincludeglobalinitiativesliketheInternationalLaborOrganization’sKnowAboutBusinessandStartandImproveYourBusiness and regional programslikeInjazAl-Arab.10 Formorethanthreedecades,theNewEnterprise Incentive Scheme—a programrunbyAustralia’sDepartmentofJobsandSmallBusiness—hasprovidedaccreditedtrainingandmentoringtohelpindividuals startabusiness.Deliveredbyanetworkof21providersnationally,eachyeartheschemeprovides8,600peoplewithsmallbusinesstraining,incomesupportandrentalassistanceduringtheir firstyearinbusiness.16 TrainingandinformationopportunitiesforregistryusersRegistriesoffertrainingtostart-upfirmsinjustoverone-halfofOECDhigh- incomeeconomies,thehighestshareamongtheregionsmeasuredbyDoing Business;registriesinSouthAsiaoffer When EETprogramstargetbuddingentrepreneurs,resultsshowsignificantincreases inself-employment,householdconsumption,andincometwoyearsaftertheintervention.11Overtime,evalua-tionsfindpositiveandsignificanteffects FIGURE3.4Startingabusinessandtransferringpropertytendtotakeless timeineconomieswhereworkshops areprovidedtoregistrystaff Averagetimetotransferproperty(days) Averagetimetostartabusiness(days) 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Workshopsatthebusinessregistry Workshopsatthelandregistry Notused Used Source:DoingBusinessdatabase. Note:Bothrelationshipsaresignificantatthe1%levelaftercontrollingforincomepercapita.

41. STARTINGABUSINESSAND REGISTERINGPROPERTY 37 Communicationofchangestoregistryusers Businessandlandregistriesinformthepublicofchanges—forexample,torequirementsforregisteringacompanyorsellingaproperty—usingvariouschan-nelsofcommunication.Inamajorityofeconomies,businessregistriescommu-nicatechangestothebusinessstart-upprocessviaadisseminationcampaignusingsocialmediaorphysicalbill-boards(63%)andpublicbroadcastsontelevisionorradio(65%).Trainingandworkshopsarealess-commonmethodofconveyingsuchchanges(36%). answerstospecificinquiriesrelatedtoprocedures.Oftheeconomiesincludedinthiscasestudy,57%haveahelpdeskspecificallyforpropertyregistra- tionavailabletothepublic.Ingeneral,economieswithapublicly-availablehelpdesktendtohaveahigherscoreonthequalityoflandadministrationindex.19Thehelpdesk,whichisentirelyfocusedonuserandcustomersatis-faction,improveslandregistryqualitybyprovidingfeedbackonthetypesofissuesraisedbycustomers,whichtheregistrycanthenaddress.SincePeru’sSuperintendencia NacionaldelosRegistros Públicos (SUNARP,thenationalpublicregistrysuperintendency)establishedtheCitizenAttentionCenterin2014,thehelpdeskhasaddressedmorethanhalfamillioninquiries.Thecenter’slawyers,registrationlawspecialists,provideguidancefreeofchargeonregistrationandgeneralproceduresatthelandregistry.Allcitizenshaveaccesstothisservicevia e-mail,chatand a freehotline,AlóSUNARP.Economiesthathaveahelpdeskatthelandregistrytendtoperformbetterontheeaseofregisteringpropertyindicatorsetandhaveabetterscoreinthequalityoflandadministration index.20 theleasttrainingtoentrepreneurs(figure3.5).Wheretrainingopportunitiesareofferedtoentrepreneurs,theseusuallytaketheformofgroupclasses,work-shopsandseminars.Onlinecoursesareavailableinone-thirdoftheeconomiesthatoffertraining. Trainingcanbeofferedtoanyonestartingabusinessbut,insomecases,speciallearningopportunitiesaredirectedtotargetedgroups,suchasyouth,elderlyandwomanentrepre-neurs.However,just17%ofeconomiesthatprovidetrainingimplementtargetedtrainingprograms.InNigertheChamberofCommerceandIndustryandtheNationalEmploymentPromotionAgencyrunanentrepreneurshiptrainingprogramtailoredspecificallytoyoungpeople,includinghighschoolstudentsandotheryouthswhodidnotcomplete formaleducation.18 Incomelevelplaysarolein determiningwhichcommunicationmethodisused.Businessregistriesinaroundtwo-thirds(70%)oflow-andmiddle-incomeeconomiesusepublicbroadcasting;thoseinhigh-incomeeconomiesrelymoreheavilyonweb-based methodsofdissemination,suchaspublicationonthebusiness registry’s website. Helpdesksplayacriticalroleinaddressingcitizensconcernsandinquiriesregardingvariousprocessesdevelopedbypublicagencies.Byprovidingaccesstoinformationhelpdesks actasastrategic educationaltoolforthepublic;theyallowcitizenstohave Similarly,whenanewinitiativeisadoptedbythelandregistry,orwhensignificantchangesaremadetothelegislationoranew systemisimplemented,registriesin46%ofeconomiescommunicatethose FIGURE3.5MostOECDhigh-incomeeconomiesprovideregistrytrainingtoentrepreneurs Shareofeconomies(%)100 90 80 70 60 50 40 30 20 10 0 Training Notraining Source:DoingBusinessdatabase.

42. 38 DOINGBUSINESS2019 FIGURE3.6Startingabusinessandtransferringpropertytendtobefasterwhenregistrychangesareintroducedthroughdisseminationcampaigns Averagetimetostartabusiness(days) Averagetimetotransferproperty(days) 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Disseminationcampaignsatthebusinessregistry Disseminationcampaignsatthelandregistry Notused Used Source:DoingBusinessdatabase. Note:Forthebusinessregistry,thisrelationshipissignificantatthe1%levelaftercontrollingforincomepercapita.Forthelandregistry,thisrelationshipissignificantatthe5%levelaftercontrollingforincomepercapita. -records-management-and-information -systems-community-of-learning-exchange#1. 9.Theshareofeconomies(asmeasuredbythiscasestudy)thatholdregulartrainingprogramsforlandregistryofficialsisasfollows:OECDhighincome(45%);EastAsiaandthePacific(40%);SouthAsia (38%);EuropeandCentralAsia(32%);MiddleEastandNorthAfrica(32%);LatinAmericaand theCaribbean (29%); and Sub-SaharanAfrica(24%). changestothepublicthrough adissemi-nationcampaign;61%relymostheavilyontelevisionandradio. NOTES ThiscasestudywaswrittenbyCyrianeCoste,MarieLilyDelion,FatimaHewaidi,FrédéricMeunier,AlbertNoguesiComas,NadiaNovik,NathalieReyes,ErickTjongandYuriyValentinovichAvramov. Whencitizensaremadeawareofthechangesimplementedatthebusinessandlandregistries,theymaybemorelikelytoasserttheirrightswithconfi-dence.DoingBusinessdatashowthatittakes13dayslessonaveragetostartabusinessand19dayslessonaveragetotransferapropertywhenadissemina-tioncampaignisusedtocommunicatechangestothepublic(figure3.6). Formoreinformation,seetheregistriestrainingsectionofthewebsiteoftheAssociationofAlbertaRegistryAgents(AARA)athttp://www.aaratraining.com /index.aspx?tabid=1. Fourie 1998. Theshareofeconomies(asmeasuredbythiscasestudy)withalegalrequirementfortrainingisasfollows: EuropeandCentral Asia(59%);EastAsiaandthePacific (28%);OECDhighincome(27%);LatinAmericaandtheCaribbean(16%); Sub-SaharanAfrica (16%);SouthAsia(13%);andMiddleEastandNorthAfrica(11%). Formoreinformation,seethewebsiteoftheAsociaciónProfesionaldeRegistradoresathttp://www.apregistradores.com/. UNECE 1996. Williamson2000.7.FAO 2017. 8. FormoreinformationontheWorldBank’sLandRegistrationandCadastreModernizationProjectin Turkey,seehttp://documentsworldbank.org /curated/en/774231526581694132/pdf /Disclosable-Version-of-the-ISR-Turkey-Land -Registration-and-Cadastre-Modernization -Project-P106284-Sequence-No-21.pdf.AdditionalinformationontheWorkshoponLandRecordsManagementandInformationSystems:CommunityofLearningExchangecanbefoundathttp://www.worldbank.org/en /events/2017/06/12/workshop-on-land Valerio,PartonandRobb2014. Valerio,PartonandRobb2014. Valerio,PartonandRobb2014. 13. Dana2001. CravoandPiza 2016. Bruhn2011. FormoreinformationonAustralia’sNewEnterpriseIncentive Scheme, seethewebsiteoftheDepartmentofJobsandSmallBusinessathttps://www.jobs.gov.au/self-employment -new-enterprise-incentive-scheme-neis. Valerio,PartonandRobb2014. LeSahel.2014.“SignaturedeconventionsdefinancemententrelePRODEC,laCCIANetl’ANPE:prèsde404millionsdeFCFApoursoutenirlaformationprofessionnelleetl’insertionéconomiquedesjeunes.”January 30.http://news.aniamey.com/h/11947.html. Thisrelationshipissignificantatthe1%levelaftercontrollingforincomepercapita. Thisrelationshipissignificantatthe1%levelaftercontrollingforincomepercapita. CONCLUSION Trainingcanbeimportantforensuringthequalityofbusinessandlandregis-tries.DatacollectedforDoingBusiness2019suggestthattraininginitiativesarebeneficialtobothregistryofficersandentrepreneurs.Accesstotrainingforregistryofficialsandthepubliccanbeprovidedthroughavarietyofchannels.Workshops,learningprograms,helpdesks,mediabroadcastsandawarenesscampaignscanimprovetheefficiencyofbusiness andlandregistries andcreatea well-informedpublic.

43. DOINGBUSINESS2019 Understandingthebenefitsofwiringregulation GettingElectricity • Arobustregulatoryframeworkgoverningtheelectricitysectorandaccreditingtheelectricianprofessionprotectspublicsafety byhelping • themarketovercomeasymmetryof informationandmoralhazards. An extensive fire broke out inone of Bamako’slargestmarkets,the MarchéRose, inDecember 2017.Businessownerswatchedastheir investmentswere destroyed.1Afterthefirewasextinguished,theextent ofthedamagewasclear—hundredsofstallshadbeenburntdownatacostofmorethan1billionCFAfrancs(approximately$1.7 million),mostofwhichwasshoulderedbysmallfirms.Aninvestigationbytheutilitylaterfoundthatfaultyinstallation ofelectrical wiring caused thefire. • DoingBusinessdatashowthatapproximatelythree-quartersof economieshaveanelectricalcodeor regulationsetting forthstandards for electricalinstallations. Suchincidentsactasareminderthatelectricityisinherentlyhazardous.However,electrificationiscrucialforeconomicdevelopment—itsimpactoneducation,laborandincomeiswelldocumented.Householdelectrificationisestimatedtoresultinanaverageriseof around7%inschoolenrollment,25%inemploymentand30%inincome.2Whereelectricityservicesaredeficient,firmperformanceisnegativelyimpacted.WorldBankEnterpriseSurveydatafor2017indicatethatbusinessownersindevelopingeconomiesperceivealackofreliableelectricitysupplyasthebiggestobstacletotheoperationoftheirbusi-nesses,behindonlyaccesstofinance,theinformalsectorandpoliticalinstability.3 Safetyisoftenabsentfromthediscussionon accesstoelectricity.Faultywiringcancausedirectharmorindirectinjuryduetofiresorexplosions.Toadequatelymitigatesafetyrisks,electriciansmustbewellqualified.However,withoutaproperaccreditationsystem,asymmetryofinformationarises—thesellerofagood(orservice,inthiscase),has greaterknowledgethanthebuyer.7Thepublic isunabletodifferentiateagoodelectricianfrom a bad one. Regulationisalsoneces-sarytooffsetnegativemarketexternali-tiesthatarisewhenafirmisnotliablefor • Requirements forqualificationsandskilldevelopmentintheelectricalprofessioncanpreventelectricalsystemfailureincidents.Barely • two-thirdsoftheeconomiescoveredbyDoingBusinessrequireelectricianstohaveaccreditationsguaranteeing theirqualifications tocarryouta building’sinternalwiring. • Mandatoryinspectionsandliabilityregimesintroduceaccountabilityvis-à-visthepartyundertakingtheinternalwiringworksofabuilding.Inspectionscanbecarriedout byutilities,certifiedelectricalengineersorthird-party inspectionbodies.Suchinspectionsare requiredinabout 70%ofeconomies. thefullcostofaneconomicdecision. 8 Ultimately,thehiringdecisionwillvarydependingontheperspectiveofthe consumer—oneindividualmaybewillingtohireanunqualifiedprofessionalwhiletheneighboringcommunitymaynot(as itwouldbearthefullcostassociatedwithfaultywiringinthecaseofafire). Therearemyriadsupply-sideimpedi-mentstogainingaccesstoelectricity.Acomplicatedconnectionprocess,forexample,canmakeobtaininganewelec- tricityconnectiondifficultforanewly- incorporatedstartup.4Furthermore,once connectedtothegrid,firmsmayfaceblackoutsthatforcethemtohaltproduc-tion5orhikesinelectricitytariffsthat • DoingBusinessdataindicatethat effectiveregulatoryregimesthatprotectthepublicfromelectricalsystemfailureincidentsalso tend tohaveanefficientgridconnectionprocess. THEHUMANANDECONOMICCOSTOFFAULTYWIRING Between2011and2015,firedepart- underminetheirproductivity.6 ments in theUnitedStatesresponded to

44. 40 DOINGBUSINESS2019 nearly200,000firesatmanufacturingorindustrialproperties.Thesefirescausedthelargestshareofciviliandeathsanddirectpropertydamage,averaging$1.2billionannually.9Mostindustrialpropertyfiresaretheresultofincidentsassociatedwith“electricaldistributionandlightingequipment”(figure4.1).Thetypesofequipmentmosttypicallyinvolvedinafire’signitionarethewiringinstallationortransformerandpowersupply.Moreover,theleadingcauseofignitioniselectricalfailure(forexample,ashortcircuitoranarcfromabrokenconductor). are(i)electriciansnotconformingwithwiringcodesandstandards,and(ii) non-certifiedelectricalengineersper- formingwiringinstallationandconnec- tionworks.Unsurprisingly, dataindicatethatsevenofevery10firesinurbanareasinPeruaretheresultofdefective electricityinstallations,suchasfaulty wiringorequipmentthatdoesnot complywiththenormsoftheNationalElectricCodeandNormNTP370.304ElectricalInstallationsofBuildings.11 energyconsumption have been foundtospureconomic expansion.14 Smallandmedium-sizeenterprises(SMEs)areespeciallydependentongridaccessastheyoftenlacktheresourcestorelyoncaptivepowersolutions.DoeandAsamoah(2014)findthatwithoutreliableenergysupply,SMEsinGhanastruggletoboostoutput,resultinginlowprofitability.15Similarly,researchonelectricityprovisioninIndiashowsthattheexpansionoftheelectric-itynetworkboostsindustrialdevelop-mentandincreasestheperformanceofsmallerfirms.16 ENSURINGSAFEACCESSTOELECTRICITYMAKESECONOMICSENSE Deadlyfiresinvolvingelectricalfailurearecommon,particularlyindevelopingeconomies.InSouthAfrica,forexample,electricalfiresaccountedfor80%oftheeconomiclosscausedbythe46,000 firesthatwereattendedtoin2015.10Improperequipmentoftencausessuchfires.In2012,afiredestroyedashoefactoryinLahore;investigatorslaterconfirmedthatafaultyelectricalgen-eratorwastoblame.Incorrectwiringinstallationisanothermajorcauseofelectricalfires.Peru’sNationalInstituteofQuality(INACAL)hasreportedthatthemaincausesoffiresinthatcountry Giventheimportanceofelectricity,managingtherisksassociatedwithitsuseisimperative.Thelackofprofes-sionalcertificationrequirementsandqualitycontrolsthatcharacterizeaninadequatelyregulated electricitysectorreinforcetheasymmetryofinformationindividualsfacewhenassessingthequalificationsofelectriciansandengi-neers.AnalogoustoAkerlof’s“lemonsproblem,”17unqualifiedelectriciansmaydrivetheirqualifiedcounterpartsoutofthemarketsincethelattergroupwill Therisksassociatedwithelectricalfailuresunderminefirms.Atthesametime,accesstotheelectricalgridisakeydriveroffirmproduction.AcasualrelationshiphasbeenestablishedbetweenelectricityconsumptionandeconomicgrowthinIndia,Indonesia,thePhilippinesandThailand.12AcrossSub-SaharanAfrica,itisestimatedthattheeconomicgrowthdragofaweakpowerinfrastructureisabout2percentagepointsannually.13InNigeria,increasesin FIGURE4.1ElectricalfailureistheleadingcauseofindustrialpropertyfiresintheUnitedStates Shareofindustrialfiresbycause (%)60 50 40 30 20 10 0 Electrical distributionand lightingequipment Allother(orunkown) Heating equipment Torch,burnerandsolderingiron Exposurefire Intentional Directpropertydamage Fires Sources:Campbell2018;NationalFireProtectionAssociation. Note:Dataareannualaveragesfortheperiod2011–15.

45. GETTINGELECTRICITY 41 bereluctanttolowertheirpricesiftheycannotmakeareturnontheireduca-tional investment.Inturn,thequalityofelectricianserviceswillsuffer. Whenelectriciansarecertifiedandlicensed, thepublichas proof of their professional qualification andan informedhiringdecisioncanbemade. Furthermore,intheeventthatawiringdefectcausesafire,thesocietalcostscanextendbeyondtheprivatepartiesontoneighboringcommunities.Becauseprivatecompaniesdonotassumealldamages,theirdecisionsmaystandincontrasttosocietalinterests.Inshort,iftheelectricitymarketisunregulated,thehiring party may finditeconomicallyjustifiabletouseanunqualifiedelectri-cianratherthanawell-qualified(butmore expensive)technician. across190economies,approximatelythree-quartersofeconomieshaveanelectricitycodeorcomprehensivelegisla-tivetextthatcoverssome oralloftheseareas.Havingclearregulationinplaceestablishesafoundationforregulatingtheelectricalprofession.TheNationalElectricCodeofBarbados,forexample,setsforthrequirementsforprofessionalqualificationstocarryoutelectricalwiring,conditionsforinspectionsofelectricalwiringandprerequisitesfortheprofessionalqualificationsnecessary toinspectelectricalwiring. Independentregulatoryagenciescontributetothedesignofregulationgoverningelectricalinstallationsafetyingoodpracticeeconomies.Aninde-pendentregulatorcanensureclarityandtransparencyandformthebasisofasystemthatencouragesaccountability.18InSouthAfrica,forexample,thestatu- toryBureauofStandards(SABS)hasanexplicitmandatetopromotequalityinproductsand servicesin severalsectors,includingengineeringcertificationsandelectricalappliances. standardsacrossAfricaandaimstoincorporateinternationalgoodpractices.Itcurrentlyhas11statutorymembers. Communicationisjustasimportantasregulation—marketplayersmustbeinformedoftherules.Afirststep,there- fore,istomakethelawsthatstipulatetherequiredprofessionalqualificationsforelectricians—aswellasnormsonelectricalequipmentandinstallation —availabletothepublic.Inmostecono-mies,electricitycodesandregulationsarenotpubliclyavailableonlineandonlyhalfofeconomiesmeasuredbyDoing Businessprovidealistofstepsonlinewhichcustomersmustcompletetoobtaina newconnection. Arobustregulatoryframeworkgovern-ingtheelectricitysectorisnecessarytomaintainpublicsafety.Regulationmustbetransparentandcoverabroadrangeofareas.Examplesofgoodpracticeinelectricitysectorregulationarehigh-lightedbelow,asarekeyfindings fromaDoingBusinesscross-economy compari-sonofelectricalwiringsafetyprovisions. Intheeventofalegislativechangetoelectricitysectorregulation,marketparticipants—includingemployeesofthedistributionutilityandprivatecontrac- tors—mustbeinformedswiftly.Whilemodesofcommunicatingsuchchangesvaryfromoneeconomytoanother,two-thirdsofdistributionutilitiesreportorganizingtrainingworkshopsforengineers,techniciansandinspec- torsinvolvedintheconnectionprocesswhenachangeinregulationoccurs. Themajorityofeconomies,however,donotprovide publicfundsforsuchprograms. CLEARREGULATION:THEFIRSTSTEPTOWARD ENSURINGPUBLIC SAFETY A regulatoryfoundationestablishesqualificationrequirementsandelectri-calinstallationnorms.Innearlyalleconomiesprivatecontractorscarryouttheinternalwiringwithinbuildings.Andinaboutone-halfoftheeconomies coveredbyDoingBusiness,privatefirmsundertaketheconnectionworksoutsidethebuilding,fromtheswitchboardtothenetwork.Itis,therefore,important thatcommercialinterestsnot beplacedahead ofpublicsafety. Commonstandardsandrulesencouragesharedmanufacturingfacilitiesacrosseconomies.19Itisindeedeasierforprivatefirmstooperatebeyondtheirbordersineconomieswhereregulation issimilar.TheEuropeanCommitteeforElectrotechnicalStandardization(CENELEC)hasstrengthenedregula-torycoherencebyaligningtheelectricalinstallationstandardsofthemembersoftheEuropeanUnionthroughstan-dardHD384onElectricalInstallationsofBuildings. Thesestandardsprovideclearguidelinesonelectricalinstalla-tionsfornewbuildings.Similarly,theAfricanElectrotechnicalStandardization Commission(AFSEC),establishedin ENSURINGELECTRICIANSHAVETHERIGHTSKILLS Whenelectriciansare certifiedandlicensed,thepublichasproofoftheirprofessionalqualificationandaninformedhiringdecisioncanbemade.Certification andlicensingmechanismscanincentivizequalifiedprofessionalstooffertheirservices,astheircreden-tialwillallowthemtostandoutfrom Regulationshouldprovide clear ruleson normingelectrotechnicalequipment, stipulatingprofessionalrequirementsinrelationtoelectriciansandinstall-ers,and(iii)establishinganinspectionregimetoensurewiringworksareup tocode.DoingBusinessdatashowthat, 2008, promotestheharmonizationof theiruncertifiedcounterparts.

46. 42 DOINGBUSINESS2019 ElectricalWorkers(REWs)mustpartici-patetorenewtheirregistration.Thetrain-ingconsistsoftwomodules:(i)statutoryrequirementsinelectricityordinance,wir-ingregulationsandsafetyprotocols;and(ii)disseminationofinformationonthedesign,maintenanceandtestingofelectricalinstallations.TheCPDSchemerequiresREWstocompletethetraining, whichisprovidedbyvariousorganiza-tionsandagencies,withinthethreeyearspriortotheexpirationoftheirregistra-tion.21Similarly,intheUnitedStates,alllicensedprofessionalengineersinthe stateofCaliforniaarerequiredtoobtain32hoursofcontinuingeducationatanapprovedtraineeschool—oranyfederateorstateapprenticeshipprogram—everythreeyearspriortotherenewaloftheirlicense.Elsewhere,the private sectorhastaken an activeroleinorganizingtrainingprogramstoimprovethequalificationsofallconstructionprofessionals.TheKorea oftheseeconomiesareinSub-SaharanAfrica(figure4.2). Proofofprofessionalexperienceandeducationiscommonlyrequiredforprofessionalstocarryoutelectricalinstallationworks.Differentapproachesexistacrosseconomies,however,withregardstolicensing.Licensescanbeissuedbyadedicatedpublicauthority —forexample,theElectricalandMechanicalServicesDepartmentinJamaica—orthenationalregulatorybody,asinthecaseofUganda’sElectricityRegulatoryAuthority.Otherecono-miesrelyonprofessionalorgan-izationsoracademicinstitutionstoissuelicenses.InPakistan,electriciansperforminginternalinstallationsarerequiredtobeamemberoftheboardofengineers,aprofessionalbodythatregulatesthe engineeringprofession.IntheDominicanRepublic,licensesareissuedbytheColegioDominicanodeIngenierosArquitectosyAgrimensores(CODIA,anationalengineeringasso- ciation).Inothereconomies,including BruneiDarussalamandSingapore,theutilityisresponsibleforissuing certifications.Suchcasesareusually confinedtosmallereconomieswheretheutilityisverticallyintegratedandhasbroadnationalcoverage. Whileentryintotheelectricaltraderequiresregulation,emphasisshouldalsobeplacedoncontinuingpar-ticipation.Manyelectriciansare self-employedandarenotassociatedwithaprofessionalbodyatthetimetheyreceivetheirtradelicense.Assuch,keepingthemuptodateonnewregulationortechnologicalchangescanbechallenging.Mostcompanieslackthefinancialresourcestoofferformaltrainingtotheiremployees.Insomeeconomies,therefore, theonusisputonelectricianstoremainactivetoretaintheirlicense. HongKongSAR,China,offersanexten-siveprofessionaltrainingprogram—theContinuingProfessionalDevelopment(CPD)Scheme—inwhichallRegistered Therequirementstobecertifiedasanelectricianalsovarywidelyacrosseconomies.InMalaysia,tocarryoutinternalwiringworks,onemustberegisteredasaprofessionalengineerandhaveatleastthreeyearsofpro-fessionalexperience,havesuccess-fullycompletedtherequiredcourses asdeterminedbytheBoardofEngineersMalaysiaandhaveeitherundergoneaprofessionalassessmentexaminationorbeamemberoftheInstitutionofEngineersMalaysia.20InGermany,elec-trical contractorsrequireacertificationwhichtheycanonlyobtainthroughanAusbildung,aprogramthatcombinesanapprenticeshipandeducation.Whilemosteconomiesmeasured byDoing Businessmandateaminimumlevelofeducationtoundertakeinternalwiringinstallations,about30%ofeconomies havenorequirementsatall—andmany

47. GETTINGELECTRICITY 43 andlacktheappropriateequipmentforelectricalservices.22 internalwiringofthebuildingtoensurecompliancewiththeapprovedplans.Inspectionsapprovaliscommunicatedinternallywithintheutility,allowingDEWAtocarryouttheexternalelectri-calworks immediatelywithouttheneedforthecustomertobepresent. ElectricAssociation,forexample,whichiscomprisedofcorporationsthatareengagedinelectricity-relatedbusinesses,providesregulartrainingprogramstaughtbyleadingexpertsintheindustry. Despitetheinformationprescribedinelectricalcodesandother regulation, technicalauditsoftenrevealfaultsindesign,installationandmaintenance.Inspectionsprovideanincentivetocom-plywithregulation.Initialinspections —carriedoutbeforethefacilitybecomesoperational—canhelpidentifyandfixanynonconformityoftheinstallation.23Ineconomieswhereprivatesectorelectriciansmaketheexternalconnec- tiontothenetwork,nearlyallrequirethattheutilityinspecttheconnectionworksaheadoftheelectricityturn-on.Similarly,inabout70%ofeconomies coveredbyDoingBusinessinspections ofanewbuilding’selectricalwiringare compulsory. ENSURINGTHATINTERNALINSTALLATIONSARESAFETHROUGH MANDATED INSPECTIONS ORLIABILITYREGIMES Third-partybodiescarryoutinspectionsinaboutone-thirdofeconomieswithinternalwiringinspectionrequirements.InCôted’Ivoire,apublicworksinstitu-tion,theLaboratoireduBâtimentetdesTravauxPublics(LBTP),istaskedwithensuringthatallinternalelectricalinstal-lationscomplywithsafetystandards.Tothisend,aninspectorexaminesvariouspointsontheinstallation—thegrounding,theelectricalpanel,andsoon.Clientscanonlyapplyforanewcon-nectiononcetheinstallationhasbeenapprovedandacertificateofconformityhasbeen issued. Regulatorycomplianceisasessentialastherulesthemselves.In2009,afirecausedbyineffectivegroundingandagingcablesdestroyedthebuildingoftheMinistryof ForeignAffairsinAccra,Ghana.Asisoftenthecaseineconomies where thereis a shortageofqualifiedengineers andalargeinformalsector,althoughregulationexisted—Ghana’sNationalWiringCode—ithadnotbeenobserved.InKenya,theinfor-malsector,alsoknownasjuakali,isextensivelyinvolvedinthemanufactur- ingsector.Astudyofelectricalsafetymanagementin Kenya’sinformalsectorshowsthatmostjuakalioperatorsdonotfollowelectricalsafetyregulations Inspectionsaretypicallycarriedoutbytheutility,athird-partyagencyoracertifiedelectricalengineer(figure4.3).Utilitiesperformthisfunctioninnearly40%ofeconomieswhereinternalwiringinspectionsarerequired.IntheUnitedArabEmirates, theDubaiElectricityandWaterAuthority(DEWA)checksthe Insomeeconomies,privatecertifiedelec-tricalengineersprovideinternalwiringinspections.InCroatia, aninternalwiringcertificatemustbesubmittedbeforethe utility,HrvatskaElektroprivreda(HEP),installsthemeter.Thiscertificate,which FIGURE4.3Whoconductstheinspectionoftheinternalwiringinstallationpriortotheelectrificationofacommercialbuilding? Shareofeconomieswithinternalwiringinspectionmethod (%) 100 90 80 70 60 50 40 30 20 10 0 SouthAsia Sub-Saharan Africa EastAsia&Pacific LatinAmerica&MiddleEast&CaribbeanNorth Africa Europe&CentralAsia OECD highincome Third-partyagency Certifiedprivateengineer Noinspectioncarriedout Other Utility Source:DoingBusinessdatabase.

48. 44 DOINGBUSINESS2019 DoingBusinessdatarevealthateconomiesthatprovideefficientgridconnectionservices(asmeasuredintermsoftimeorcost)alsotendtohave(i)clearlegalstandardsstatingthequalificationsnec-essarytocarryouttheinternalworksand (ii)arequirementforaninspectionoftheinternalinstallation.Atthegloballevel, thoselow-incomeeconomiesthatmeetatleast one ofthesetwocriteriaconnectbusinesses tothegrid in about25% lesstimeonaverage.Andacrossincomegroups,economieswithaninternalwir-inginspectionhave,onaverage,lowerconnectiontimes.“Smart”regulationdoesnot need tocomeattheexpense ofanefficientconnectionprocess. provesthattheelectricalinstallationhasbeentested,canbepreparedbytheclient’selectrician,providedtheyhavetherequiredaccreditation,or—inmostcases—byathird-partyfirmiftheelectricianlackstherequiredaccredita-tion.Theutility issuesafinalconnectionapprovaloncethisdocumentationisdeemedsatisfactory. electricianprofessioniswellregulated,normsarerespectedandtheinformalsectorissmall,liabilityregimesmaybesufficienttoensurepublicsafety,pro-videdthereisanefficientcourtsystemtofosteraccountability.Internalwiringinspectionsforlowerriskconstructionsmay notbe necessary,asiscurrentpracticeinOECDhigh-incomeecono-miessuch as Germany andSweden.Theseeconomiesdonotrequireinternalwiringchecksas allelectricians(i) mustundergoarigorousprofessionalcertifi-cationprocessand(ii)areheldlegallyresponsiblethattheinstallationstheycarry outare uptocode. Because the circumstancessurround-ingelectricalfailuresvarysignificantly,blanketrecommendationsoninternalwiringinspectionschemesareunhelpful. Mandatoryinspectionsmaybeadvisableineconomieswithahistoryoffaultywiringincidents;however,arisk-basedapproachmaybemoreapplicableineconomieswheretheelectricityprofes-sioniswell-regulatedandqualificationstandardsareenforced.Despitevariedpractices,onerecommendationholdstrueacrossalleconomies:inspectorsshouldreceiveadequatetrainingandhaverelevantqualifications. Therealityinothereconomies,however,standsinstarkcontrasttothatoftheOECDhigh-incomeeconomies.Manyeconomieslackthequalifiedprofession-alsneededtoimposestrictqualificationrequirements,makingtheimplementa-tionofliability regimesmorechallenging.Evenwheretheelectricianprofessioniswellregulated,unqualifiedprofessionals maystilloffertheirservicesiftheinfor-malsectorislargeandlawenforcementisweak.Manyeconomieswiththesecharacteristics(rightfully)require thatallinternalwiringinstallationsbeinspectedto avoidincidents. Dubaiprovidesagoodexampleofbal-ancingefficiencyandwiringcompliance.TobecertifiedbytheDubaiElectricityandWaterAuthority(DEWA),prac-ticingelectricalengineersmustpass theMunicipality ExamforElectricalInstallation.Thisrequirementallowsthe utilitytominimizethenumberofproce-duresneededtocompletetheprocesswhentheapplicationissubmittedwithoutjeopardizingwiringsafetystandards.Theinternalwiringinspectionisscheduledwhentheapplicationtotheutility issub-mittedthroughtheutility’sonlineportalbythecustomer’selectricalcontractor.Moreover,duetothestandardizationofinternalwiringguidelines,theexternalconnectionworksarecommenced at thesametimetheinspectioniscarriedout, withtheresultscommunicatedinternallywithinDEWA. Beyondinspections,anotherwaytoensurethesafetyofinternalinstal-lationsistoimplementclearliabilityregimes,placinganaddedresponsibilityonelectriciansbyholdingthemlegallyresponsible when incidentsoccur.InthePhilippines,forexample,theBoardofElectricalEngineerscansuspendelec-tricalengineersforunprofessionalordishonorableconduct.Thelaw specifiesthecircumstancesunder whichanelec-tricalengineercanbesuspendedfromprofessionalpractice(forexampleinthecaseoffraudulentdocuments).Also,incasesofwiringregulationviolations,thelawgivesanyperson,firmorasso- ciationtherighttofilechargesresult-ingintherevocationoftheelectricalengineer’slicense. REGULATIONAND EFFICIENCYARENOTMUTUALLYEXCLUSIVE Electricitysectorregulationiscrucial. However,regulationshouldbedesignedtotransfertheregulatoryburdenawayfromend-users.InMauritania,theutil-ityrequiresthatallelectricalmaterialsboughtontheprivatemarket—includingthetransformer—becheckedbythe utilitybeforetheprivateelectricalcon-tractorcanbuildasub-station;thisaddstimeandinteractionstotheconnectionprocess.Alternatively,inNigeria,mate-rialsmustbepurchasedfromaccrediteddistributors,whichselltransformersthatalreadyincludeatestcertificatefrom DoingBusinessdata suggestthatelectric-ityservicesareinnowaymadeworsewherethereisregulationthatgovernsinternalwiringinspectionsandqualifica-tions.Forexample,therearefewerpoweroutages,on average,ineconomieswhereaninternalwiringinspectionisnecessary,whichinturnmayreducethelikelihoodoffaultywiringdefects.Moreover,acrossregionsandincomegroups,thereisnosignificantdifferenceinthenumberofprocedures—oreventheconnection Thechoiceofwhethertoemployinternalwiringinspectionsorliabilityregimes(orboth)variesfromeconomytoeconomyasitdependsonmyriadfac- tors(suchasexistingregulation,thesizeoftheinformalsectororhistoryofwir- time—in economieswithinternalwiring ingincidents).Ineconomieswherethe themanufacturer.

49. GETTINGELECTRICITY 45 FIGURE4.4Thenumberofprocedurestoconnecttothegridaresimilaracrossincomegroupswhetheraninternalwiringinspectionisrequiredornot Averagenumberofprocedurestoobtainanewelectricityconnection 6 5 4 3 2 1 0 LowincomeLowermiddleincome Economieswithinternalwiringinspections UppermiddleincomeHighincome Economieswithnointernalwiringinspections Source:DoingBusinessdatabase. Doing Businessdatademonstratethateconomieswithefficientelectricalcon-nectionprocessestendtohaveclearlegalstandardsandqualitycontrolsfornewelectricalconnections.Inotherwords,regulatoryregimesthatprotectthepublicfrom electrical failure incidents also tendtodelivergoodservicestobusinessesthroughanefficientgridconnectionprocessorareliablenetwork. inspection requirementscomparedtothosewithnone(figure4.4). Abeberese 2016. Akerlof1970.8.Kapp1950. 9.Campbell 2018. 10.FireProtectionAssociationofSouthAfrica2015. CONCLUSION 11. InternationalCopperAssociationLatinAmerica.2012.“El 70%delosincendiosurbanossedebealasmalasinstalacioneselectricas.” September4.http://programacasasegura.org/pe/2012/09/04 /el-70-de-los-incendios-urbanos-se-debe-a -las-malas-instalaciones-electricas/. Establishedstandardsforelectricalmaterials,wiringinstallationsandelectriciansarenotonlyessentialforpublicsafety—they alsomakeeconomicsense.Qualificationrequirementsforprofessionalelectricianshelpindividualsovercometheasymmetryofinformationtheywouldotherwiseface.Accreditationsystemsthatfocusonbothexperienceand educationare essential. Asafu-Adjaye2000. AndersenandDalgaard2013. Okafor2012. DoeandAsamoah2014.16.Rud2012. Akerlof1970. Wren-Lewis2014. Josias2014. Formoreinformation,seeBoardofEngineersMalaysiaApplicationforRegistrationasaProfessionalEngineer.Availableathttp://www .bem.org.my/documents/20181/43352 /PEnotes.pdf. Formoreinformation,seetheContinuingProfessionalDevelopmentSchemeforRegistered ElectricalWorkersoftheHongKongSAR,China,ElectricalandMechanicalServicesDepartment.Availableathttps://www .emsd.gov.hk/en/electricity_safety/cpd _scheme_for_rew/index.html. Mutaiandothers2007. Rangel,QueirozandOliveira2015. NOTES ThiscasestudywaswrittenbyAhmadF.AlKhuzam,JeanArlet,ViktoriyaEreshchenkoandSilviaCarolinaLopezRocha. LeRepublicain. 2017.“ViolentincendieaugrandmarchédeBamakohier:Unmortetdescentainesdemagasinspartisen fumée.”December13.https://www.maliweb.net /societe/violent-incendie-grand-marche-de -bamako-hier-mort-centaines-de-magasins -partis-fumee-2721832.html. Jimenez 2017. AccordingtoWorld Bank Enterprise Surveydata,over11%ofbusinessownersindevelopingeconomiesperceivealackofreliableelectricitysupplyastheirbiggestobstacle,behindaccesstofinance(15%),theinformalsector(12%)andpoliticalinstability(12%).Formoreinformation,seehttp://www .enterprisesurveys.org. GeginatandRamalho2015. Aligning nationalnormswithinterna-tionalstandardscanensureregula-torycoherenceandfacilitatethesafeuseofelectricity.Regulationaloneisnotsufficient—compliancewiththelawisjustasimportant.Tothisend,manyeconomieshaveinstitutedinspectionregimesforinternalwiringinstallations.Othereconomies haveputinplace liabilityregimessothattheelectricianscarryingoutthewiringinstallationareheldaccountableinthecaseof futureincidents. 5. Scottandothers2014.

50. DOINGBUSINESS2019 TradingAcrossBorders Trainingfortradefacilitation • In today’sglobalized and highlydigitalizedtrading environment, theabilityoftradeprofessionalstobenefit fromelectronic systemslargely dependsontraining andcommunication. In recentyears, • DoingBusinesshascapturedreforms thathighlightthe fundamentalrole playedby education,training andcommunication intradefacilitation. Nearlyadecadeago,theWorldCustomsOrganization(WCO)highlightedthe importance of educationfor tradefacilitationbyadvocatingfor knowledge-basedservices,trainingandcapacitybuilding.TheWorldTradeOrganization’s(WTO)TradeFacilitationAgreement (TFA)thatenteredinto force inFebruary2017further emphasizedthe importance of theseinstrumentsintrade facilitation.TheWCOforesawthattheeffectiveuseof informationandtools—suchaselectronicplatformsandrisk-basedinspec-tions—bycustomsprofessionalswouldhelpeconomiesreduce the timeandcostsassociated with tradingacross borders.1Intoday’sglobalizedandhighly-digitalizedtrading environment,however,theabilityoftradeprofes-sionalstoreapthebenefitsofthesetoolsdependsheavilyontrainingandcommunication.Indeed,theWTOcitestrainingasoneofthemostimportantelementsinthesuccessfulimplementationoftradefacilitationmeasures.2 • Oftheeconomiesthatimplemented tradereformsascapturedinDoingBusiness2019,85%regularlyprovidetrainingtocustomsclearanceofficials. • Trainingofcustomsclearanceofficials andcustomsbrokersispositivelyassociatedwithlowerborderanddocumentarycompliancetimes. on behalfoftheexporterorimporter.Customsofficialsperformseveraltasksonbehalfofcustomsadministrationsincludingvaluation,documentarychecks,physicalinspectionsofcargoandpost-clearanceaudits.Customsbrokers’dutiesincludepreparingtradedocumen-tation,ensuringthepropertransferofcargoaswellasadvisingonexportingand importingrequirements. Given thesetasks,communicationandtrainingonnewtradeprocesses,aswellasonITdevelopments,arecritical. Cross-bordertradeisacomplexendeavor.AccordingtotheUnitedNationsConferenceonTradeandDevelopment(UNCTAD),theaverageinternationaltradeoperationinvolvesbetween20and30parties. Trading includesnotonlygovernmentactorssuchascustomsandportauthoritiesbutalsobrokers,commercialbanks,vendors,insurance companiesandfreightforwarders.3Customs clearanceofficialsandcustomsbrokersaretwoofthemostimportantpartiesinvolvedinatypicalinternationaltradetransaction.Theyhavedifferentbutinterconnectedroleswithregardstoeducation,trainingandcommunicationsincetheyaretheprovidersandusersofcustomsservices,respectively.Whilethecustomsclearanceofficialisanemployeeofthecustomsadministrationwhoactsasalawenforcementofficer, thecustomsbrokerisathird-party,privateentity • DoingBusinessdataindicatethatthe averagetimerequiredtoclearcustoms(forbothexportsandimports)is34%lowerineconomieswhereclearance officersreceiveregulartrainingcomparedtothosewherenoregulartrainingisprovided. • Worldwide,organizingworkshopsisthemostcommonly-usedchannelof communicationtoconveychangesinpracticeorregulationstocustomsofficialsandcustomsbrokers. DoingBusinessdatashowthateducationandtraining,togetherwithcommunica-tionwithcustomsclearanceofficialsandcustomsbrokers,playanimportantroleinthesuccessful implementationoftrade-relatedreforms.Educationandtrainingfacilitatetheimplementationofnewpoliciesaswellasthedevelop- • Amajorityofeconomiesdonotrequire aformaluniversitydegreetooperateasacustomsbroker. However,brokersare requiredtoobtainalicensein75%of economiesmeasuredbyDoingBusiness. mentofthespecificskillsorknowledge whodeals directly with customsofficials