Doing Business in 2004:
For more information, visit our
Understanding Regulation is
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the first in a series of annual
http://rru.worldbank.org/doingbusiness
reports investigating the scope and manner of regulations that enhance business activity and those that constrain it. New quantitative indicators on business regulations and their enforcement can be compared across more than 130 countries, and over time. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why.
ISBN 0-8213-5341-1
Doingbusiness in 2004
Doingbusiness in 2004 Understanding Regulation
A copublication of the World Bank, the International Finance Corporation, and Oxford University Press
iii
© 2004 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, D.C. 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail
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Contents
Acknowledgments Preface
viii
Overview 1
vii
xi
Building New Indicators of Business Regulation 1 Doing Business Methodology 2 Other Indicators in a Crowded Field Notes 15
2
Starting a Business
7
17
How Easy Is Business Entry? 18 Are Entry Regulations Good? Some, Yes—Many, No What to Reform? 24 Notes 27
3
Hiring and Firing Workers
29
What Is Employment Regulation? 30 Large Divergences in Practice 33 What Are the Effects of Employment Regulation? What to Reform? 37 Notes 38
4
Enforcing Contracts
41
Which Courts Are Socially Desirable? 46 What Explains Differences in Court Efficiency? What to Reform? 49 Notes 53
5