Business Environment Reform
What makes up the business environment?
In short, it is comprised of the policy, legal, institutional and regulatory conditions that govern business activities.
Reforming policy and legal framework means improving laws and policies which affect private investment and trade and promote competition, open markets, and other conditions for private sector development. These include, for example, laws governing competition, trade, tax, labour, insolvency, and specific industries.
Reforming regulatory and administrative framework means improving regulations and administrative procedures through which the above laws and policies are implemented. Inefficient, overly complicated, costly and uncoordinated regulations and procedures can become a significant stumbling block to private sector development.
All regulations which govern trade and investment, establishment, operation and closure of businesses, and specific industries, are important areas of reform:
- business start-up, licensing and inspections
- industry-specific licenses and permits (e.g. construction)
- customs administration (trade logistics)
- land administration (access to land)
- business taxation
- judiciary - court administration, alternative dispute resolution, contract enforcement
Specifically, building capacity of public administrations to improve:
- quality of regulations
- management of administrative procedures
- public-private dialogue
- investment policy and promotion
Business environment reform is important because policymakers and experts have come to realize that the quality of the business environment contributes to economic growth and poverty reduction.
These and other insights into the cornerstones and principles of business environment reform are available in the excellent guide by the Donor Committee for Enterprise Development attached below.
Several other usefuls resources are linked below.
The Doing Business project
IFC/World Bank Business Enabling Environment Toolkits
Reducing administrative burdens - SCM Network
EU Better Regulation
OECD Regulatory Reform
Economic Reconstruction and Development in South East Europe - European Commission/The World Bank
