Insights from the foreign direct investment regulations indicators of the World Bank Group.

Author:Pouget, Sophie

The joint International Finance Corporation (IFC) and World Bank department focusing on Global Indicators & Analysis has developed sophisticated indicators (accessible online (1)), which are recognized and used within the World Bank Group and very broadly externally by organizations worldwide. Several projects have been developed, including the flagship product Doing Business, which focuses on domestic small and medium-size companies throughout their life cycle and provides quantified and comparable measures of the relevant business regulations and their enforcement. This product ranks 183 economies globally and is published annually since 2002. The Subnational and Regional Doing Business Reports follow the Doing Business methodology and capture differences in business regulations and their enforcement across locations in a single country or region. In that respect, they also rank each location. The Enterprise Surveys focus on company-level data in emerging markets and developing economies and benchmarks the quality of the business and investment climate across countries. They reach out to more than 130,000 firms in 125 countries but do not rank countries. The Foreign Direct Investment Regulations Indicators initiative (formerly named Investing Across Borders) focuses on regulations related to foreign direct investment around the world and presents quantitative indicators on economies' laws, regulations, and practices affecting how foreign companies invest across sectors; start businesses and access industrial land; hire skilled expatriates; convert and transfer currencies; and arbitrate and mediate their commercial disputes. It does not rank countries. Finally, the Women, Business and the Law Report presents indicators based on laws and regulations affecting women's prospects as entrepreneurs and employees in order to inform research and policy discussions on how to improve women's economic opportunities and outcomes. It does not rank countries either.

All these indicators present different characteristics and have different purposes and angles of analysis. However, they all correspond to what an indicator is generally understood to be--a tool to translate a reality on the ground in a given country into a numerical representation, with implicit references to some particular standards. Indicators simplify the reality, make it understandable and comparable across countries, and sometimes offer the possibility to score and rank countries...

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