Determinants of Doing Business Reforms

Mohammad Amin, Enterprise Analysis Unit, FPDEA, World Bank
Simeon Djankov

Abstract

This note identifies quality of democracy and amount of natural resources as important determinants of Doing Business reforms. Reforms are more likely in countries with better democracy and less reliance on natural resources. Differences across countries in overall development as measured by income per capita; initial quality of business environment; and ethnic, linguistic, and religious fractionalization within a country have little to do with the proclivity to reform. Additionally, there is no evidence of reform fatigue. In fact, past reformers are much more likely to reform in the future than nonreformers.