Doing Business blogs

  • Planning for recovery—Italian cities can cut red tape by sharing good practices

    Author(s) : Tommaso Rooms Topic : Subnational Doing Business: Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Enforcing Contracts Short description : Excessive bureaucracy at any time is a burden on companies, and in the aftermath of the coronavirus crisis it is an additional hurdle that jeopardizes the ability of SMEs (Small to Medium Enterprises) to survive. A recent study, conducted in Italy before the crisis, highlights specific opportunities to cut red tape by replicating good practices already implemented locally. Local good practices present the advantage of not requiring major legislative overhaul to be adopted nationally, and they have already been successfully tested within the country.

  • Rules vs. discretion in public procurement

    Author(s) : Erica Bosio Topic : Contracting with the Government Short description : The tradeoff between rules and discretion has been a central topic of research in public procurement. New research confirms that politicians do not trust the bureaucracy, even in countries with high human capital and efficient institutions.

  • How does digital technology help in the fight against COVID-19?

    Author(s) : Charlotte Nan Jiang and Julie Ryan Topic : Other Short description : Over the past few months, we have seen how digital technology helps in the fight against COVID-19 (coronavirus). Using cross-sectional data on internet usage and epidemic risk for 180 economies, we show that countries with wider internet access and safer internet servers tend to be more resilient to epidemics such as COVID-19.

  • Efficient public procurement comes to the rescue

    Author(s) : Erica Bosio, Emilia Galiano and Nathalie Reyes Topic : Contracting with the Government Short description : Governments around the world are wondering how to save their small and medium-sized enterprises during the economic downturn caused by the coronavirus (COVID-19). Look no further: just pay your bills on time. Public procurement represents approximately 12% of global GDP. If governments paid all receipts due to their contractors within 45 days, between $1 trillion to $4.65 trillion in fresh liquidity would enter the private sector, supporting firms’ cash-flow needs and preventing them from accessing credit. This is not trivial.

  • Achieving commercial justice in the new COVID-19 world

    Author(s) : Maksym Iavorskyi and Joseph Lemoine Topic : Enforcing Contracts Short description : As economies gradually lift confinement measures and businesses reopen, it is crucial to evaluate the potential consequences of COVID-19 (coronavirus) pandemic for commercial justice around the world. Many cases were put on hold for weeks, and many more will flood the courts as companies continue to default on some of their obligations or choose to file for bankruptcy. Alternative dispute resolution (ADR) mechanisms, such as arbitration, mediation and conciliation, can support courts in handling the upcoming tsunami of litigation.

  • Stuck with the bill: the need for cross-border VAT refunds

    Author(s) : Tamar Matiashvili, Joanna Nasr Topic : Paying Taxes Short description : A value-added tax (VAT) is recoverable, and the burden of paying it and reclaiming it should not rest on businesses. An effective VAT refund system is therefore crucial to fulfilling the rights of business taxpayers to be relieved of that burden. Generally, most countries operate under an input-output VAT model, which means that VAT-registered businesses may credit paid VAT against their supplies or obtain VAT refund.

  • It’s time to expand unemployment protections

    Author(s) : Simeon Djankov and Dorina Georgieva Topic : Employing Workers Short description : ​In earlier blogs we proposed several ideas to alleviate the economic slowdown. These ideas included delaying certain tax payments, making access to new credit easier, and expanding procurement work. Here we focus on extending unemployment insurance to all workers that have been laid off.

  • Tax relief in a time of crisis: what countries are doing to sustain business and household liquidity

    Author(s) : Simeon Djankov and Joanna Nasr Topic : Paying Taxes Short description : Governments around the world are offering tax relief to address the problem of liquidity for households and businesses and to brace for the economic slowdown precipitated by the coronavirus (COVID-19) pandemic. The Paying Taxes indicator in Doing Business monitors tax reform trends across countries, with a view to keeping governments informed about fiscal reform efforts, and offers an overview of global efforts.

  • 3 ways to increase liquidity in the business sector

    Author(s) : Erica Bosio, Simeon Djankov and Rita Ramalho Topic : Getting Credit Short description : When facing economic slowdowns of the type that the world is experiencing now, it is vital to put more liquidity in the hands of the private sector. With this money, businesses can pay workers, buy supplies, or withstand slow demand for their product until the economy is nursed back to health.

  • Making access to new credit easier

    Author(s) : Erica Bosio, Simeon Djankov and Filip Jolevski Topic : Getting Credit Short description : In anticipation of a coming economic slowdown, governments are rushing relief policies to alleviate the impact on the economy and, in particular, on businesses. One such policy is easing credit, which aims to (1) avoid permanent job losses, (2) expand the social safety net, and (3) boost consumer demand.

  • Immediate action needed: four ideas to alleviate economic slowdowns

    Author(s) : Erica Bosio, Simeon Djankov, Rita Ramalho Topics : Paying Taxes, Resolving Insolvency, Contracting with the Government Short description : Searching for ideas to alleviate sudden economic slowdowns is a perpetual concern for governments. As the world works to manage the COVID-19 crisis and a possible slowdown, a number of governments have announced preliminary measures in recent days and weeks, ranging from providing automatic rollovers of debt to small businesses (for example, Italy and Germany) to extending unemployment insurance equivalent to nearly 100 percent of wages to all laid off workers (France).

  • How are countries making it easier to pay taxes?

    Author(s) : Simeon Djankov, Joanna Nasr Topic : Paying Taxes Short description : Over the 15 years that Doing Business has been comparing tax systems globally, countries have made it easier for companies to pay their taxes, new data on tax reform shows. For the 174 economies included in the analysis, there has been a 32% drop in the number of required tax payments since 2004. Over the same period, the average length of time spent by companies in meeting their tax obligations has fallen by 27%.

  • Giving creditors a voice for a better insolvency process

    Author(s) : Klaus Koch-Saldarriaga, Raman Maroz, Nina Dannaoui Topic : Resolving Insolvency Short description : Creditors have a direct interest in efficient resolution of insolvency. Robust creditors’ rights will bring the creditor’s relevant expertise to the fore and balance the actions of the debtor/insolvency administrator. As shown by the Doing Business data, a better protection of creditors’ rights is associated with higher recovery rates of creditors’ investments. This also leads to lowering the cost of credit and increasing the volume of private lending.

  • Private versus public electricity distribution utilities: Are outcomes different for end-users?

    Author(s) : Ahmad F. Alkhuzam, Jean Arlet, Silvia Lopez Rocha Topic : Getting Electricity Short description : This blog inquiries whether publicly- and privately-owned utilities differ across regions, in terms of their performance regarding the reliability of supply, the efficiency of connection services, and the price of electricity. The research on 201 cities covered by Doing Business finds that overall there are no major differences between the efficiency and quality of services which commercial end-users receive from private or public utility companies. Also, many utilities are owned by public-private partnerships, a type of ownership structure that deserves future research.

  • Barriers to urban electrification in Sub-Saharan Africa from the perspective of end-users

    Author(s) : Jean Arlet, Viktoriya Ereshchenko, Silvia Lopez Rocha Topic : Getting Electricity Short description : This blog analyzes the barriers to access to electricity in the Sub-Saharan Africa region, where 60% of the population did not have access to this basic service. Among the obstacles identified based on Doing Business data, which can discourage households from seeking new connections in several economies, are the high frequency and duration of power outages; the relatively high electricity prices; and the complexity and costs to obtain a new connection to the power grid. It is argued that increasing access to electricity requires policies that focus on the services end-users receive from distribution utilities, and not only on supply-side factors.

  • WTO’s Trade Facilitation Agreement and Doing Business reforms: Are they related and how?

    Author(s) : Inés Zabalbeita Múgica, Marilyne Youbi and Cécile Ferro Topic : Trading across Borders Short description : Small differences in the time and cost to trade can determine whether or not a country participates in global value chains. In this respect, the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA), which came into force on February 22, 2017, is a landmark achievement given its comprehensive coverage of the issues around cutting red tape and promoting efficiency and transparency, as well as the fact that it is the first multilateral agreement since the establishment of the WTO in 1995. Coincidentally, the Trading Across Borders (TAB) indicator of Doing Business measures the efficiency of national regulations in trade facilitation and keeps track of relevant reforms, allowing us to analyze how the provisions of the TFA are related to the reform efforts of governments around the world.

  • Ten years of reforms in getting electricity

    Author(s) : Viktoriya Ereshchenko, Youmna Al Hourani, Lidia Panarello, Silvia Carolina Lopez Rocha and Erick Tjong Topic : Getting Electricity Short description : Electricity is essential for businesses. Power shortages negatively impact firms’ revenues, cause losses in output, and hinder productivity and growth. Since Getting Electricity was first added to the areas measured in the Doing Business report in 2010, a total of 189 reforms were implemented around the world, leading to improvements in access to electricity and in the quality of supply.

  • Data on trends in insolvency reform

    Author(s) : Simeon Djankov and Klaus Koch-Saldarriaga Topic : Resolving Insolvency Short description : We have documented changes in the insolvency laws of 190 countries around the world over the past 15 years. The goal of this dataset—part of the Doing Business project—is to enable research relating such changes to the development of financial markets and the real economy. In a 2008 research paper with professors Oliver Hart and Andrei Shleifer at Harvard University we explored the initial evidence. Now we examine the three most promising trends in reform, excluding changes that affect the legal index added in 2014.

  • How did starting a business become easier than ever?

    Author(s) : Frederic Meunier, Nadia Novik, Cyriane Coste and Erick Tjong Topic : Starting a Business Short description : With more jobs and competitiveness in mind, many economies worldwide have simplified their business start-up rules and regulations over recent years. Since the first Doing Business report was launched 15 years ago in 2003, a total of 626 national reforms that reduced the time and the costs of starting a business were recorded globally.