How easy is it doing business in the world?

How easy is it doing business in the world?

The link between corruption and doing business seems obvious. In fact, the arbitrary application of laws and regulations on a non-transparent basis is a major obstacle to doing business in many countries around the world. One might expect, therefore, that a country’s corruption rank should be in line with its easy of doing business counterpart. However, some inconsistencies can be observed when comparing countries based on these aforesaid aspects.

This simple chart allows to match-up country’s ranks by both corruption and doing business. In particular, this chart compares the Corruption Perception Index with the Ease of Doing Business one. Transparency International’s Corruption Perceptions Index (CPI) is a very-well known tool that measures and ranks almost 200 countries based on how corrupt a country’s public sector is perceived to be http://www.transparency.org/). World Bank’s Doing Business Index measures the impact of regulations on business activity and ranking countries based on how favorable is their regulatory environment to the starting and operation of a local firm (http://www.doingbusiness.org/).

Clear mismatching cases are shown such as, for example, Kirgizstan and Uruguay. The former ranks among the top-50 countries in ease-of-doing-business but among the bottom-10 in terms of corruption. Uruguay instead is among the top performers in terms of corruption but very low ranked in terms of its business environment.

The remaining differences between these two complementary indexes might be due to methodological factors. Although both indexes are limited in scope, Doing Business overlooks broader questions of governance, concentrating on specific aspects such as bureaucracy and the rules that might delay business operations. The level of corruption and macroeconomic stability of a country are among those governance aspects and both have a big effect on how easy it is to do business.

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Posted Jun 29, 2011
 
Views: 1783
Tags Economy, corruption, Doing Business
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