Why would a country request a sub-national doing business study?

1. business environment reform at the sub-national levelusing doing business Mierta CapaulCapetown, May 9, 2007

2. Why would a country request a sub-national doing business study? • It captures regional differences in regulations or enforcement • It includes rules and regulations at all levels of government • It fosters competition among cities and provinces • It pinpoints bottlenecks and provides information on good practices within the same country that can easily be replicated • It gives specific locations an opportunity to tell their story • It provides a tool for locations to compete globally • It measure progress over time through repeated benchmarking • It combines media appeal of doing business with active participation of subnational governments in the reform process

3. getting started • Committment from the government • Local partner • Local champion • Support with logistics • Contacts with provincial and municipal governments • Co-financing • Other donor (DFID, USAID) • Client (example, Mexico) • IFC BEE Facilities

4. basic inputs • Choice of DB indicators • Criteria based on areas of state/ municipal jurisdiction • Selection of cities • Population • Political and economic diversity • Selection of respondents • Coordinating firm with country wide correspondent network • Translation of questionnaires into local language • Training • Participation of sub-national governments • High level commitment – focal point • Providers of information to questionnaires • Confidential consultation and “right of reply” period

5. key milestones • Kick off mission • Project presentation to provincial/municipal officials • Meetings with private sector • Right of reply • Confidential consultation with each city/province • Feedback on preliminary results • Information regarding ongoing reforms • Dissemination conference • High level public and private sector champions and academia • Media strategy

6. project timeline… the OECS example

7. doing business puts reforms on the political agenda

8. how Rio de Janeiro compares internationally how Brazilian states compare internationally

9. Starting a business Registering property Enforcing contracts Aguascalientes √ √ √ Querétaro √ √ √ Yucatán √ √ √ Guanajuato √ √ Nuevo León √ √ San Luis Potosí √ √ Chihuahua √ Coahuila √ Mexico City √ Puebla √ 9 of the 12 states benchmarked in 2005 and Mexico City reformed in at least one doing business indicator

10. -OECD -Europe & Central Asia -South Asia -Middle East & North Africa -East Asia & Pacific -Sub-saharan Africa -Latin America & Caribbean 2006 Mexico: starting a business indicator… cutting time 2005 2005 2005 2006 2006 2006 2006 2006

11. doing business goes sub-national • Mexico (12 states, December 2005) • Brazil (12 states, August 2006) • Mexico (31 states, November 2006) • Bangladesh, India, Pakistan (January 2007) • Ukraine (8 regions, May 2007) • Nigeria (11 states, May 2007) • China (15 states, June 2007) • Russia (9 oblasts, September 2007) • Colombia (12 departments, November 2007) • Morocco (8 states, August 2007) • Egypt (3 governorates, October 2007) • Philippines (20 states, 2008) • Southern Europe and Central Asia (2008) • Madagascar (2008) • Turkey (2008) • Malaysia (2008) • Tanzania (2008)?

12. does sub-national doing business work in Africa? Opportunities • Large countries – e.g. South Africa: slow growth, large unemployment • Centralized countries - weak governments • Decentralization – e.g. Nigeria, or recently, Madagascar • OHADA 16 countries in West Africa with same legal framework (like OECS) • Regulatory reform powerful at subnational or regional level if done in conjunction with central reforms • Sub-national DB good entry point to look at larger issues (e.g. land)