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 complexity of regulation, such as the number of procedures to start a business or to register a transfer of commercial property. Second, they gauge the time and cost to achieve a regulatory goal or comply with regulation, 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 minority investors against looting by company directors or the range of assets that can be used as collateral according to secured transactions laws. Fourth, a set of indicators documents the tax burden on businesses. Finally, a set of data covers different aspects of employment regulation. The 11 sets of indicators measured in Doing Business were added over time, and the sample of economies and cities expanded (table 1).
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; Doing Business is not a statistical survey, and 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. Doing Business 2018 has no major methodological change at the indicators level.
Limits to what is measured
The Doing Business methodology has five limitations that should be considered when interpreting the data. First, for most economies the collected data refer to businesses in the largest business city (which in some economies differs from the capital) and may not be representative of regulation in other parts of the economy. (The exceptions are 11 economies with a population of more than 100 million as of 2013, where Doing Business now also collects data for the second largest business city). To address this limitation, subnational Doing Business indicators were created. 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 that 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 2018 would differ from the recollection of entrepreneurs reported in the World Bank Enterprise Surveys or other firmlevel surveys.
Data challenges and revisions
Most laws and regulations underlying the Doing Business data are available on the Doing Business website. All the sample questionnaires and the details underlying the indicators are also published on the website.
Doing Business publishes 24,120 indicators (120 indicators per economy) each year. To create these indicators, the team measures more than 118,000 data points, each of which is made available on the Doing Business 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 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 2017 and Doing Business 2018 is 8.8%.
Governments submit queries on the data and provide new information to Doing Business. During the Doing Business 2018 production cycle the team received 181 such queries from governments. In addition, the team held multiple video conferences with government representatives in 65 economies and in-person meetings with government representatives from 44 economies.