The indicators presented and analyzed in Doing Business measure business regulation, the quality and strength of legal frameworks, the protection of property rights—and the effect of all these factors on businesses, especially small and medium 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 dataset covers different aspects of employment regulation. The 12 sets of indicators measured in Doing Business were added over time, and the sample of economies and cities expanded (table 1).
The Doing Business data are collected in a standardized way. To start, the Doing Business team, together with expert advisers, designs a questionnaire. The questionnaire 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.
Questionnaires are administered to more than 15,000 local experts, including lawyers, business consultants, accountants, freight forwarders, government officials and other professionals routinely administering or advising on legal and regulatory requirements (table 2). These experts have several rounds of interaction with the Doing Business team, involving conference calls, written correspondence, and visits by the team. For Doing Business 2020, team members visited 36 economies to verify data and recruit respondents. The data from questionnaires are subjected to numerous rounds of veriﬁcation, leading 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 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 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. For Doing Business 2020, the assumptions for the protecting minority investors indicator set were refocused on corporate governance for listed companies. This year’s study presents the methodology for the new contracting with the government indicator set, although the indicator set will not be included in the ranking until Doing Business 2021.
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 that had a population of more than 100 million in 2013, where Doing Business now also collects data for the second-largest business city.)1 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 2020 would differ from the recollection of entrepreneurs reported in the World Bank Enterprise Surveys or other ﬁrm-level surveys.
Data challenges and revisions
All the sample questionnaires and the details underlying the indicators are published on the website. Questions on the methodology and challenges to data can be submitted through e-mail at firstname.lastname@example.org.
Doing Business publishes 41 indicators for 10 topics (the employing workers and contracting with the government indicators are excluded). Including the employing workers indicators, the team collects more than 500,000 data points, the details of which are 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 study. To provide a comparable time series for research, the dataset is back-calculated to adjust for changes in methodology and any revisions in data due to corrections. The website also makes available all original datasets used for background papers. The correction rate between Doing Business 2019 and Doing Business 2020 is 5.0%.2
Governments submit queries on the data and provide new information to Doing Business. During the Doing Business 2020 production cycle, the team received 121 such queries from governments. In addition, the team held multiple videoconferences with government representatives in 103 economies and in-person meetings with government representatives from 51 economies.
1 These are Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation, and the United States.
2 This correction rate reﬂects changes that exceed 5% up or down.