Doing Business’ Quality Control Quarrel
The World Bank’s 2015 Doing Business edition has reacted to methodology criticism from an independent expert panel by adding regulatory quality readings to its efficiency list in ten areas drawing in several cases from members’ second commercial city. The top twenty include Korea, Estonia and Malaysia as almost 250 improvements were registered globally the past year. Sub-Sahara Africa accounted for 15 percent of progress and Europe-Central Asia had 85 percent of economies with at least one reform as opposed to the poor score for Latin America and the Caribbean. Francophone Africa and Benin, Togo, Cote d’Ivoire, Senegal and the Democratic Republic of Congo in particular had the most advances, with Azerbaijan, Trinidad and Tobago and the UAE standouts from other regions. The OHADA business code was implemented in the West African Monetary Union on company launch and minimum capital as signatories also adopted common credit bureau rules. The UAE’s shareholder rights overhaul accompanied elevation to the MSCI core universe with new disclosure and related-party transaction mandates. Trinidad and Tobago’s updated insolvency regime provided a fresh rehabilitation option, but the study found that dispute resolution can differ between major cities as with Nigeria’s 450 day average in Lagos, almost 300 days below Kano’s. The tax and permitting systems also vary greatly between country centers, and in the BRICs labor market guidelines including minimum wage are uneven. In bankruptcy “very few” economies have a robust mechanism as defined by the possibility of 50 cents on the dollar recovery, and with property transfer the process can be fast but unreliable, according to the publication. In contract enforcement both judicial and out-of-court procedures are important but specialized commercial tribunals may not be quicker or better equipped than alternatives. In the past decade relative gaps between lead and bottom performers have narrowed, with the real estate ownership shift time between the extremes down two-thirds to 60 days. The overall tax rate fell by almost 10 percent over the period, with the financial crisis lowering thresholds and introducing online payment technologies.
Singapore was number one ahead of New Zealand and Hong Kong, where the rule of law ranking has been eroded as well by Beijing’s backtracking on open elections. Tajikistan despite authoritarian rule moved the most toward the “regulatory frontier” with a one-stop investment shop and fee and tax reductions and establishment of a credit bureau. Georgia had another good year at 15th place despite presidential transition and prosecution of former officials for alleged abuses in bank and enterprise dealings. Iceland was #12 despite the persistence of capital controls and the continued concentration on fishing, tourism and alternative energy. Taiwan (19) was far above China (90), which had spearheaded the revolt against previous measures as ignoring state capacity. With the Asian Infrastructure Bank founding the challenge is more direct to the Bretton Woods institutions as both sides reassess basic foundations.
