Doing business: New Zealand, Singapore beat the US

The United States is a good place to open and run a local business, but it is even easier in New Zealand and Singapore, according to the World Bank's Doing Business 2006 report, released today. Canada came fourth in the Ease of Doing Business Index, Norway fifth and Australia sixth out of 155 countries surveyed. 

As one might expect, the five Anglosphere economies did well - all five were ranked in the top ten, a remarkably strong and consistent performance. The Nordic nations also stood out, with all five coming within the first 14.

Serbia and Montenegro was top reformer, improving in eight of the ten areas studied. It was followed by Georgia, Vietnam and Slovakia. Former Soviet bloc countries Lithuania and Estonia were ranked just behind Sweden at 15 and 16 respectively - better than most EU-15 members. Iraq (114) and Afghanistan (122) were not strong performers, but better than Congo, which came last at 155. Most of the mots business very poor performers were African countries, and they also had the lowest pace of reform.

Amongst the G10, Germany came 19th, the Netherlands 24th, Spain was 30th, France a poor 44th, and Italy a truly woeful 70th - behind such 'business friendly' regimes like Columbia, Saudi Arabia, Nepal and Columbia. The World Bank estimate that in Italy it takes 17 steps and 284 days to complying with licensing and permit requirements for ongoing business operations, which costs on average a staggering 147.3% of income per capita. Is it any wonder their economy is doing so badly?

The United Kingdom came ninth, down from seventh place last year - though the Bank notes that "this year's rankings are not comparable to last year's as three new sets of indicators - on dealing with licences, paying taxes and trading across borders - have been included". That did not stop today's Times claiming "Britain has slipped back in the race to be the best country in the world for doing business", which was "a blow to Gordon Brown’s claims to be boosting Britain’s competitiveness".

I doubt it; excluding the three new topics, the UK had the fourth best average ranking - suggesting, if anything, an improvement on last year's  rankings (though some methodologies have changed).

The 2006 report and overview (PDF) make it clear these measures of how business-friendly a country is are closely related to economic performance. Although I have some quibbles about the data and methodology, the findings are fascinating and are a valuable way of encouraging cuts in red tape for business. Well worth a look.

UPDATE: The World Bank press release has now been issued. There is also some press attention already. As mentioned, The Times tries to beat up the UK numbers. Reuters leads with Simple business rules spur job creation, and Edmund L Andrews at The New York Times highlights that New Zealand Named Best Nation for Business.

Comments

[Edward Hugh]

"and Italy a truly woeful 70th - behind such 'business friendly' regimes like Columbia, Saudi Arabia, Nepal and Columbia."

Well I think this takes us back to Duval and Elmeskov, and structural reforms and the euro (an issue you covered here).

The euro has certainly made interest rates cheap in Italy, and it has made it easier to finance all that government debt, but it doesn't seem to have been very successful in facilitating structural reforms, in fact - as Duval and Elmeskov suggest - it may be slowing them down.

[Edward Hugh]

"Serbia and Montenegro was top reformer, improving in eight of the ten areas studied."

In contrast, wanting to get into the EU - as we can also see with Turkey - can be seen to be a powerful stimulant to change.

[Edward Hugh]

"There is also some press attention already"

Yes, and in Germany the country's rise in the reform index is being highlighted.

[Pablo H.]

The press releases for all of the regions, and in various languages, are also now available online: http://www.doingbusiness.org/Main/PressReleases.aspx.

A member of the Doing Business team will actually be guest blogging on PSD Blog, http://psdblog.worldbank.org/, for the next week - shedding light on many of the points that you have raised above and what has been mentioned in recent media coverage. Just in case.