19 May 2011

Doing Business in Juba

The World Bank's Doing Business report on business regulations comes to Southern Sudan. Which is exciting if only because there are so few reports on Southern Sudan. This allows comparisons between the rules for doing business in Juba with other countries around the world (Juba would rank 159 compared with 183 other economies).

But doing business reports only tell us so much. They tell us the de jure rule, not necessarily what firms actually end up doing. One might suppose that sometimes deals are struck to bend the rules.

Lant Pritchett and Mary Hallward-Driemeie (also at the World Bank) are doing research comparing the official rules as measured by Doing Business, with what firms actually report when surveyed (on for example, the time it takes to get permits).
“Doing Business” (DB) provides measures of the time and costs associated with fully complying with an array of business regulations.  Enterprise Surveys (ES) ask a wide range of firms about their actual experiences in doing business.  We use three comparable indicators in both: time to get an operating permit, time to get a construction permit, and time to import goods, to compare these distinct de jure (DB) and de facto (ES) approaches to assessing the “investment climate” in over 100 countries ... 
cross-nationally there is very little association between the ES distributions and DB numbers ...The de jure environment appears to only affect some firms
None of which is to say that the Doing Business reports are not useful - just to be careful to remember that they are not necessarily representative of what actually happens.

1 comment:

Ibrahim said...

Roving Bandit - I agree; everybody should read the small print about the Doing Business initiative. Indeed, the report on Juba, ironically, highlights the severe limitations of the World Bank/IFC ‘Doing Business’ project as an entrepreneurial tool for South Sudan and the rest of Africa – and much of the developing world generally, too.


Judge for yourself; here are some KEY investor/entrepreneurial ‘variables’ that the Doing Business project DOES NOT INCLUDE in ANY of its cross-country comparative national and sub-national index(es):

1. The state of physical infrastructure (roads, bridges, public electricity supply etc) in said national or sub-national locality;

2. The level of human development (e.g. availability of skilled workers, literacy rates);

3. The level of violent crime;

4. Political stability – or otherwise – of government running said national or sub-national;

5. Degree of public and private corruption; and

6. Macroeconomic and financial stability;

All very relevant for those considering trading with or investing in Juba today, no??


And I think it’s also fair to say that Juba would score basement lows in all of the above categories; i.e. the REAL cost of doing business in Jubalicious!!

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