William Kramer

Measuring Change: Doing Business 07 Released

Doing Business 2007You can only change what you measure. Doing Business 2007, just released, offers good evidence of the wisdom of this epigram. Whatever issues you might have with the way the World Bank Group does its work, it would be hard to quarrel with the value they are bringing to business climate reforms – at least as I see it. The report itself mentions the dynamic, noting “When the government succeeds in these early reforms, citizens start seeing benefits – more jobs, more resources for health and education. The appetite for reform grows.

Among other findings, Doing Business 2007 finds that 112 separate economies undertook reforms between January 2005 and April 2006. Africa, which as a continent was dead last in the rankings, has climbed to third, trailing only Eastern Europe and Central Asia. Amusingly, they observe, “Watch out, rest of the world: China is a top-10 reformer.” Amusing from here, perhaps, but alarming for countries competing with this behemoth.

It keeps reminding me of one of the central theses on which we have been operating: namely that while global trade necessarily distributes competitive advantages with positive results for some and negative results for others, wage competition is a poor foundation for sustainable economic growth. Our emphasis on the “building opportunity for the majority” (as the Inter-American Development Bank frames it) by measuring, valuing, and serving the large un-served domestic markets seems increasingly to be a solid and useful perspective.

Watch for, by the way, our own contribution to the growing literature in this field, coming in late October, as a joint publication with the creators of Doing Business, the IFC; it is called Tomorrow’s Markets.

Also see: PSD Blog reviews “Doing Business 2007”