Economy - Entrepreneurship

Ease of Doing Business: Regulations and Policies, 2005

Note: All data are from the World Bank Project on benchmarking business regulations. This "Doing Business" database provides objective comparative measures of business regulations and their enforcement for 155 economies all over the world. They indicate the regulatory costs of business and can be used to analyze the challenges of would-be entrepreneurs.

Source: The World Bank Group, 2005 (Data downloaded in September 2005)

These data characterize the rather different business regulations and their enforcement in China, Europe and the USA. For an entrepreneur, these regulatory costs are important factors that may enhance or constrain investment, productivity and growth of the business.

From the perspective of entrepreneurs, the United States of America have a far better regulatory environment, than most European countries or China. Consider, for instance, the costs of starting a business: In China, an entrepreneur on average must go through 13 steps to launch a business, which will take 48 days and will cost equal to 13.6% of the per capita Gross National Income (GNI). In Germany, it will take only 9 steps to be completed in 24 days at costs of 4.7% of an average per capita GNI. However, in the United States of America, setting up a business just requires 5 procedures, which can be completed in 5 days at costs of 0.5% of a per capita GNI.

Almost every indicator in the table above confirms this clear business advantage of the United States.

For details of the methodology used in the collection and calculation of "ease of doing business" statistics see:
(1) The International Bank for Reconstruction and Development / The World Bank (2005): Doing Business in 2006. Creating Jobs. Washington, DC (ISBN 0-8213-5749-2). (2) Djankov, S. / La Porta, R. / de Silanes, F. L. / Shleifer, A. (2001): The Regulation of Entry. The World Bank. (3) The World Bank (2005): Doing Business. Benchmarking business regulations. Web site.