World Bank report identifies implementation gap in 50 countries hindering business climate

The World Bank Group's new "Business Ready" report has indicated that economies are generally more successful at creating regulations to improve their business environments than they are at delivering the public services necessary for meaningful progress.

The 2024 report, which evaluates the business conditions in 50 economies using over 1,200 indicators per country, identifies areas for potential reform and encourages improvements. 

The report's coverage will expand to include 180 economies by 2026, establishing a comprehensive global benchmark.

The findings show that most of the assessed economies perform better in terms of regulatory quality than in providing accessible public services to businesses. 

This disparity prevents businesses, workers, and society from fully benefiting from a conducive business environment. 

On the average, countries score 65.5 out of 100 for regulatory quality, but only 49.7 for the quality of public services, indicating a considerable gap. 

This gap exists across all income levels and regions, although it is narrower in high-income countries and widest in regions like Sub-Saharan Africa and the Middle East and North Africa.

The Chief Economist of the World Bank Group, Indermit Gill emphasised the importance of private sector innovation, especially given the challenges of slow economic growth, rising debt, and geopolitical tensions. 

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He noted that creating favorable business conditions is crucial for fostering the kind of economic success needed in today's world. 

The "Business Ready" report equips governments with the insights necessary to foster an environment where businesses can prosper while remaining environmentally conscious.

As the successor to the "Doing Business" project, "Business Ready" adopts a more balanced and transparent approach to evaluating a nation's business and investment environment. 

This new framework was developed in consultation with various stakeholders, including governments, private sector representatives, civil society organizations, and researchers.

The report highlights that while the private sector plays a crucial role in economic growth, it needs a supportive environment to thrive. 

"Business Ready" not only assesses the regulatory obstacles businesses face, such as the time it takes to start a business or the complexity of regulations, but also examines the public services available to support compliance. For example, the report evaluates whether governments provide online services for paying taxes or maintain public databases that improve transparency and access to credit.

The report also highlights the wide variations in business conditions across the 50 assessed economies. For example, the time required to register a domestic firm ranges from 3 to 80 days, while resolving a business dispute in court can take anywhere from 105 days to five years.

This detailed data helps businesses make informed decisions about where to operate and guides governments in fine-tuning policies to promote private sector development. While wealthier economies tend to have more favorable business conditions, the report highlights that low- and middle-income countries, such as Rwanda, Georgia, Colombia, Vietnam, and Nepal, have also achieved strong regulatory environments and public services.

Transparency is a fundamental feature of "Business Ready," ensuring data integrity and providing valuable insights for policymakers and businesses alike.