20 October 2011

New Zealand has maintained its place as the 3rd “easiest” place of Doing Business for the fourth year in row. 

The World Bank Ease of Doing Business Index was released this afternoon. The Index is an aggregate ranking of economies based on ten areas in the business life cycle – ranging from the complexity of a start-up through to a winding-up. The premise is that economic activity requires good rules that are transparent and accessible to all. The indicators of business show how easy (or how difficult) it is to operate within the regulatory environment of the 183 participating economies. While fewer and simpler regulations often imply higher rankings, this is not always the case. Protecting the rights of creditors and investors, as well as establishing or upgrading property and credit registries, may mean that more regulation is needed.


Regulation however involves a relationship with officials and the potential for processes to be corrupted for preferential treatment. This makes for interesting juxtapositions between the Ease of Doing Business Index and the Transparency International Corruption Perceptions Index. Although Singapore and New Zealand are equally least corrupt on the CPI, and respectively 1st and 3rd on the Ease of Doing Business Index, Saudi Arabia is 12th on Ease of Doing Business but 50th on the CPI. Similarly, Georgia at 16th on Ease of Doing Business is 68th on the CPI.


NZ dropped 2 places in the World Economic Forum’s 2011 Global Competitiveness Survey, which is a comparable assessment published last month, slipping from 23rd to 25th. Intriguingly China, was in 26th place, improving from 27th in 2010.


The Worldwide Governance Indicators (also developed by the World Bank) to be published later this month, will provide another comparison between standards of transparency and integrity in New Zealand and the rest of the World.