“We want people to be aware this is a different report and that we’re measuring new areas we weren’t measuring before,” said Ramalho.
For that reason, the report cannot be directly compared with last year’s, she said. (The 2014 rankings have been recalculated based on the new methodology and are available on the website.)
“Doing Business is by and large about the efficiency of regulations — how fast, how cheap, how simple it is to get a transaction completed. But now we’re branching out to also measure the quality” of regulations, she said.
New data reveal regulatory efficiency and regulatory quality go hand in hand. “We see a high correlation between the two. Countries that do it fast and cheaply are also likely to do it well,” said Ramalho.
The resolving insolvency indicator, for example, previously focused on the efficiency of the bankruptcy court system. This year’s report looks at the strength of the underlying legal system governing insolvency and whether laws follow good practices. Countries that rank low on this indicator often have outdated laws or lack an insolvency law altogether. Some countries have good laws on the books but do not implement them efficiently. Yet, without a well-functioning insolvency process in place, it’s more difficult for entrepreneurs to get financing and less likely they would risk failure or venture into a new business, said Ramalho.
“No one, looking ahead, would start a business if it’s very hard to close one,” she said. “Failure is part of life, so you want to have a legal system that knows how to deal with that.”
The 2015 report also includes data from two cities rather than one for 11 countries with more than 100 million people (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation, and the United States). In most cases, the report did not find significant differences between the two cities in terms of business climate.
Next year, Doing Business will enhance methodology, data collection, and analysis for five more indicators: obtaining construction permits, getting electricity, registering property, paying taxes, and enforcing contracts.
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