Changes to the Methodology in 2008
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 6,700 local experts, including lawyers, business consultants, accountants, freight forwarders, government officials and other professionals routinely administering or advising on legal and regulatory requirements (table 12.1). 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 2009 team members visited 73 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 doing 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 6 economies in 2007/08: China, Colombia, Egypt, Morocco, Nigeria and the Philippines. Six other subnational studies are under way, in Central Asia, Southeast Europe, Indonesia, the Russian Federation, Southeast Asia and Ukraine. And some existing studies are updated annually, such as those in India, Mexico and Pakistan. 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 2009 could differ from the perceptions 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 -- getting credit -- improved this year. Three main changes were made, affecting only the strength of legal rights index. First, a standardized case scenario with specific assumptions was introduced to bring this indicator into line with other Doing Business indicators. Second, the indicator now focuses not on tangible movable collateral, such as equipment, but on revolving movable collateral, such as accounts receivable and inventory. Third, the indicator no longer considers whether management remains in place during a reorganization procedure, better accommodating economies that adopt reorganization procedures similar to Chapter 11 reorganization or redressement procedures in civil law systems.
Data challenges and revisions
Most laws and regulations underlying the Doing Business data are available on the Doing Business website. All the sample surveys and the details underlying the indicators are also published on the website. Find answers to many questions about the methodology on our FAQ page.
Doing Business publishes 8,900 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 Business website. Data time series 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 back-calculated 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 2008 and Doing Business 2009 was 6%.