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The Doing Business report sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 10 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
The Regional Profile for Latin America & Caribbean (LAC) of the Doing Business report, presents indicators for economies in the region. It also shows the regional average, the best performance globally for each indicator and data for the following comparator regions: Latin America, Caribbean states, East Asia and the Pacific (EAP), European Union (EU) and OECD high income. The data in this report are current as of June 1, 2013 (except for the paying taxes indicators, which cover the period January–December 2012).
For policy makers trying to improve their economy’s regulatory environment for business, a good place to start is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing business based on indicator sets that measure and benchmark regulations applying to domestic small to medium-size businesses through their life cycle. Economies are ranked from 1 to 189 by the ease of doing business index. For each economy the index is calculated as the ranking on the simple average of its percentile rankings on each of the 10 topics included in the index in Doing Business 2014.
The ranking on each topic is the simple average of the percentile rankings on its component indicators. The aggregate ranking on the ease of doing business benchmarks each economy’s performance on the indicators against that of all other economies in the Doing Business sample (figure 1.1). While this ranking tells much about the business environment in an economy, it does not tell the whole story. The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business.
Figure 1.1 Where economies stand in the global ranking on the ease of doing business
Source: Doing Business database - World Bank
Knowing where the economy stands in the aggregate ranking on the ease of doing business is useful. Also useful is to know how it ranks compared with other economies in the region and compared with the regional average (figure 1.2). Another perspective is provided by the regional average rankings on the topics included in the ease of doing business index (figure 1.3).
Figure 1.2 How economies in Latin America & Caribbean (LAC) rank on the ease of doing business
*The economy with the best performance globally is included as a benchmark.
Source: Doing Business database - World bank
Figure 1.3 How Latin America & Caribbean (LAC) ranks on Doing Business topics
Regional average ranking
Source. Doing Business database - World Bank
The Doing Business methodology has limitations. Other areas important to business - such as an economy’s proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders and getting electricity), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions- are not directly studied by Doing Business. The indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policy makers in designing regulatory reform.
More information is available in the full report. Doing Business 2014 presents the indicators, analyzes their relationship with economic outcomes and recommends regulatory reforms. The data, along with information on ordering the Doing Business 2014 report, are available on the Doing Business website at http://www.doingbusiness.org.
Some Doing Business indicators for selected countries in Latin America