The World Bank publishes an annual Doing Business report that looks at which countries offer the most optimal conditions for entrepreneurship. The ranking takes into account eleven indicators, including the ease of starting a business, dealing with construction permits, getting power, and obtaining credit.
According to the most recent report, Singapore claims the top spot for the tenth time in a row. The city-state of 5.5 million is universally recognized as one of the world’s leading economic and financial centers, scoring favorably in everything from competitiveness and fiscal stability, to quality of life and human development. While it is a de facto one-party state with strong, if subtle, authoritarian tendencies, its government manages to be one of the least corrupt and most efficient in the world — a rarity for most autocracies.
The following is a full list of the top ten:
The worst performing countries were Eritrea, Libya, South Sudan, and Venezuela; unsurprisingly, nations with little or no rule of law, despotic governments, and chronic civil strife tended to do poor. There were a few more takeaways courtesy of Bloomberg Business:
Australia fell out of the top 10, dropping to 13th in the World Bank’s annual Doing Business report. It was replaced by Sweden, which had previously been ranked 11th. The U.S. remained in seventh place and Japan slid five spots to 34th place. China rose six spots to 84th, while India climbed 12 places to 130th out of 189 economies, including Hong Kong and Taiwan…
…The rankings have become a focus for Indian Prime Minister Narendra Modi, who has set a goal of reaching the top 50 by 2017.
Since the ranking was created in 2003, low-income countries have improved more than their high-income counterparts, according to the report.
“As they have an opportunity to look at best business practices in some of the better-performing countries in the world, they are beginning to adopt many of these practices”, Augusto Lopez-Claros, director of the global indicators group at the World Bank, said on a conference call with reporters this week.
It is interesting to note that nearly half the countries in the top ten –Denmark, Sweden, Norway, and Finland — are known for their very high tax rates, large government sectors, and “socialistic” policies. It goes to show that a big and well funded public sector is not necessarily a detriment to business, provided of course than tax revenues are sourced efficiently, public funds invested effectively, and policies conducted transparently and on the basis of empirical evidence. It is no doubt a difficult balance to maintain, and to some degree attributable to the unique circumstances of these nations — deeply imbedded egalitarian values, strong social cohesion, etc. — but it is still worth researching and attempting to emulate.
Granted, there is more to a society’s health than its ability to facilitate business activity; the U.S.’s high ranking is commendable but besides the point given the high rate of poverty, inequality, and wage stagnation. Still, allowing people to pursue their economic interests to the fullest extent is a good proxy for social prosperity; it means more avenues to greater income and self-fulfillment, none of which are mutually exclusive with easy access to education, healthcare, childcare, and other public services widely available in the majority of top countries. After all, how can a business thrive without a healthy and skilled workforce, or quality infrastructure and power grid, a robust state that can enforce the rule of law and safeguard markets, and so on.
What are your thoughts?