DB FM qxd 19 09 2003 14 28 Page i 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 feedback worldbank org All rights reserved 1 2 3 4 04 03 02 A copublication of the World Bank and Oxford University Press The findings interpretations and conclusions expressed here are those of the author s and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent The World Bank cannot guarantee the accuracy of the data included in this work The boundaries colors denominations and other information shown on any map in this work do not imply on the part of the World Bank any judgment of the legal status of any territory or the endorsement or acceptance of such boundaries Rights and Permissions The material in this work is copyrighted No part of this work may be reproduced or transmitted in any form or by any 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2003 14 28 Page ii Doingbusiness in 2004 DB FM qxd 19 09 2003 14 28 Page v 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 Getting Credit 55 Sharing Credit Information 56 Legal Rights of Creditors 61 Explaining Patterns in Creditor Protections 64 What Is the Impact on Credit Markets 65 What to Reform 66 Notes 69 6 Closing a Business 22 71 What Are the Goals of Bankruptcy 72 Effects of Good Bankruptcy Laws 78 What to Reform 79 Notes 82 48 35 DB FM qxd 19 09 2003 14 28 Page vi Doing Business in 2004 7 The Practice of Regulation 83 Regulation Varies Widely around the World 83 Heavier Regulation Brings Bad Outcomes 87 Rich Countries Regulate Business in a Consistent Manner 88 What Do These Findings Mean for Economic Theory Principles of Good Regulation 92 Notes 95 References 97 Data Notes 105 Doing Business Indicators Country Tables 133 List of Contributors vi 179 115 90 DB FM qxd 19 09 2003 14 28 Page vii Acknowledgments Doing Business in 2004 was prepared by a team led by Simeon Djankov Caralee McLiesh co managed development and production of the report The work was carried out under the general direction of Michael Klein Simeon Djankov coordinated the work on starting a business and hiring and firing workers Caralee McLiesh led the work on getting finance Tatiana Nenova designed and implemented the study on closing a business Simeon Djankov and Stefka Slavova coordinated the work on enforcing a contract The team also comprised Ziad Azar Geronimo Frigerio Joanna Kata Blackman and Lihong Wang and was assisted by Bekhzod Abdurazzakov Yanni Chen Marcelo Lu Totka Naneva and Tania Yancheva Zai Fanai and Grace Sorensen provided administrative support Andrei Shleifer co authored the main background studies and provided valuable suggestions throughout the writing of the report Florencio Lopez de Silanes and Rafael La Porta co authored the background studies on starting a business hiring and firing workers and enforcing a contract Oliver Hart coauthored the background study on closing a business Bruce Ross Larson edited the manuscript Nataliya Mylenko contributed to the research and chapter on getting credit The survey of credit registries was developed in cooperation with the Credit Reporting Systems Project in the World Bank and the survey on closing a business was developed with the assistance of Selinda Melnik Nicola Jentzsch and Fredreich Schneider wrote background papers on the regulation of credit information and the informal economy respectively Leszek Balcerowicz Hernando de Soto Bradford DeLong and Andrei Shleifer contributed lectures on the scope of government Preparation of the report was made possible by the contributions of more than 2 000 judges lawyers accountants credit registry representatives business consultants and government officials from around the world Many of the contributors are partners in Lex Mundi law firms or are members of the International Bar Association Their names are listed in the Contributors section and their contact details are on the Doing Business web site Individual chapters were refereed by Elizabeth Adu Asya Akhlaque Gordon Betcherman Harry Broadman Gerard Byam Gerard Caprio Amanda Carlier Jacqueline Coolidge Asli Demirguc Kunt Julia Devlin Michael Fuchs Luke Haggarty Mary HallwardDriemeier Linn Hammergren Eric Haythorne Aart Kraay Peter Kyle Katarina Mathernova Richard Messick Margaret Miller Claudio Montenegro Reema Nayar S Ramachandran Jan Rutkowski Stefano Scarpetta Peer Stein Ahmet Soylemezoglu Andrew Stone and Stoyan Tenev A draft report was reviewed by David Dollar Cheryl Gray W Paatii Ofosu Amaah Guy Pfeffermann and Sanjay Pradhan Axel Peuker Neil Roger and Suzanne Smith provided advice and comments throughout the development of the report Tercan Baysan Najy Benhassine Vinay Bhargava Harry Broadman Gerard Caprio Mierta Capaul David Dollar Qimiao Fan Caroline Freund Alan Gelb Indermit Gill Frannie Leautier Syed Mahmood
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