Improving Business Regulation
For countries seeking economic growth, the role of government is to facilitate business and commerce while limiting abusive economic behavior. This role is accomplished through proper regulations administered by appropriate regulatory systems.
Supporting World Bank’s Doing Business Project
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| Farmer in the Chapare region of boliva proudly shows his new land titles. |
USAID recognizes that improper regulation increases the costs and risks of doing business and reduces competitiveness and productivity. As part of our approach to helping countries improve their business enabling environments, we support the World Bank’s Doing Business project, which benchmarks 10 areas of business regulation for 181 countries. The Doing Business index allows countries to identify reform needs for costs and delays imposed by business regulation. Each year, top reformers from around the world are publicly recognized and applauded through the Reformers’ Club, a joint effort of USAID and the World Bank. A 2008 Africa top reformer, Senegal used the Doing Business tools to reduce the number of days required to start a business from 58 to 8!
USAID also supports the International Financial Corporation’s (IFC) efforts to promote municipal reform and competitiveness at the subnational level. In Colombia, for example, USAID supported a 2008 IFC report that identified important obstacles and discrepancies in municipal business environments. The Colombian national government has endorsed reforms recommended in the report and challenged municipal governments to enhance efforts to draw investment and boost local economic growth.
Regulatory analysis through BizCLIR
USAID has adapted the Doing Business approach to provide in-depth, comprehensive analysis of each of the 10 regulatory areas through its Business Climate, Legal and Institutional Reform (BizCLIR) Project. BizCLIR gives reformers a thorough understanding of the legal and institutional constraints to a better business environment. Areas examined include:
On these topics, USAID collaborates with the World Bank to produce a series of best practices. We continue to capture lessons learned along with expert opinions on important topics affecting the business enabling environment.
To complement BizCLIR, USAID has developed AgCLIR, a system for identifying constraints to competitiveness in agriculture and agro-industry. AgCLIR helps to address reform priorities necessary to reverse food insecurity caused by poor enabling environments for agriculture. We are also working to apply lessons learned from our years of work in the business enabling environment to identify business-related problems in the health sector, policy problems affecting value chains, and negative impact of regulations on businesswomen.
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