Data Notes

The indicators presented and analyzed in Doing Business measure business regulation and the protection of property rights—and their effect on businesses, especially small and medium-size domestic firms. First, the indicators document the degree of regulation, such as the number of procedures to start a business or to register and transfer commercial property. Second, they gauge regulatory outcomes, such as the time and cost to enforce a contract, go through bankruptcy or trade across borders. Third, they measure the extent of legal protections of property, for example, the protections of investors against looting by company directors or the range of assets that can be used as collateral according to secured transactions laws. Fourth, they measure the flexibility of employment regulation. Finally, a set of indicators documents the tax burden on businesses. For details on how the rankings on these indicators are constructed, see Ease of doing business (PDF, 51KB).

The data for all sets of indicators in Doing Business 2010 are for June 2009. Two new economies -- Cyprus and Kosovo -- were added to the sample, now comprising 183 economies.

Methodology
The Doing Business data are collected in a standardized way. To start, the Doing Business team, with academic advisers, designs a survey. The survey uses a simple business case to ensure comparability across economies and over time - with assumptions about the legal form of the business, its size, its location and the nature of its operations. Surveys are administered through more than 8,000 local experts, including lawyers, business consultants, accountants, freight forwarders, government officials and other professionals routinely administering or advising on legal and regulatory requirements. These experts have several (typically 4) rounds of interaction with the Doing Business team, involving conference calls, written correspondence and visits by the team. For Doing Business 2010 team members visited 43 economies to verify data and recruit respondents. The data from surveys are subjected to numerous tests for robustness, which lead to revisions or expansions of the information collected.

The Doing Business methodology offers several advantages. It is transparent, using factual information about what laws and regulations say and allowing multiple interactions with local respondents to clarify potential misinterpretations of questions. Having representative samples of respondents is not an issue, as the texts of the relevant laws and regulations are collected and answers checked for accuracy. The methodology is inexpensive and easily replicable, so data can be collected in a large sample of economies. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. Finally, the data not only highlight the extent of specific regulatory obstacles to business but also identify their source and point to what might be reformed.

Limits to what is measured
The Doing Business methodology has 5 limitations that should be considered when interpreting the data. First, the collected data refer to businesses in the economy’s largest business city and may not be representative of regulation in other parts of the economy. To address this limitation, subnational Doing Business indicators were created for 17 economies in 2008/09: Albania, Bosnia and Herzegovina, China, Colombia, Croatia, Egypt, India, Italy (Veneto region), Kosovo, FYR Macedonia, Mexico, Montenegro, Morocco, Nigeria, the Philippines, Serbia and the United Arab Emirates (Abu Dhabi). Five other subnational studies are under way, in Central Asia, Indonesia, Kenya, the Russian Federation and Ukraine. Some existing subnational studies are updated annually to measure progress over time or to expand geographic coverage. This is the case in Colombia, India, Mexico, Nigeria, Pakistan and the Philippines. These subnational studies point to significant differences in the speed of reform and the ease of doing business across cities in the same economy.

Second, the data often focus on a specific business form—generally a limited liability company (or its legal equivalent) of a specified size—and may not be representative of the regulation on other businesses, for example, sole proprietorships. Third, transactions described in a standardized case scenario refer to a specific set of issues and may not represent the full set of issues a business encounters. Fourth, the measures of time involve an element of judgment by the expert respondents. When sources indicate different estimates, the time indicators reported in Doing Business represent the median values of several responses given under the assumptions of the standardized case.

Finally, the methodology assumes that a business has full information on what is required and does not waste time when completing procedures. In practice, completing a procedure may take longer if the business lacks information or is unable to follow up promptly. Alternatively, the business may choose to disregard some burdensome procedures. For both reasons the time delays reported in Doing Business 2010 would differ from the recollection of entrepreneurs reported in the World Bank Enterprise Surveys or other perception surveys.

Changes in what is measured
The methodology for one of the Doing Business topics -- employing workers -- was updated this year. The assumptions for the standardized case study were changed to refer to a small- to mediumsize company with 60 employees rather than 201. The scope of the question on night and weekly holiday work has been limited to manufacturing activities in which continuous operation is economically necessary. Legally mandated wage premiums for night and weekly holiday work up to a threshold are no longer considered a restriction. In addition, the calculation of the minimum wage ratio was modified to ensure that an economy would not benefit in the scoring from lowering the minimum wage to below $1.25 a day, adjusted for purchasing power parity. This level is consistent with recent adjustments to the absolute poverty line. Finally, the calculation of the redundancy cost was adjusted so that having severance payments or unemployment protections below a certain threshold does not mean a better score for an economy.

Data challenges and revisions
Most laws and regulations underlying the Doing Business data are available on this website. All the sample surveys and the details underlying the indicators are also published on the website. Questions on the methodology and challenges to data can be submitted through the website’s “Ask a Question” section.

Doing Business publishes 8,967 indicators each year. To create these indicators, the team measures more than 52,000 data points, each of which is made available on the Doing Busines website. Historical data for each indicator and economy are available on the website, beginning with the first year the indicator or economy was included in the report. To provide a comparable time series for research, the data set is backcalculated to adjust for changes in methodology and any revisions in data due to corrections. The website also makes available all original data sets used for background papers. The correction rate between Doing Business 2009 and Doing Business 2010 was 5.5%.

Note: The data for paying taxes refer to January–December 2008.