Box: Nuts and Bolts of the BEEPS Survey

The business environment is multidimensional and includes key aspects of governance provided by the state, such as business regulation and taxation, law and order and the judiciary, infrastructure, and financial services. Firms’ ability to function affectively is also affected by the extent of corruption, both administrative corruption, which is often associated with the arbitrary application of laws and regulations, and state capture, whereby firms seek to influence the content of specific laws and regulations to the benefit of narrow private interests rather than broad public interests. The behavior and performance of firms also have many dimensions. In this context BEEPS focuses on the growth of firms, including their decisions to invest and to innovate, and the growth of firms’ revenues and productivity.

BEEPS asks firms to assess how their business operations are affected by the functioning of state institutions, physical infrastructure, and financial institutions. The survey assesses seven broad areas: taxation, business regulation, corruption, crime, the judiciary, infrastructure, and finance. Firms were asked to assess how problematic these factors were for their operations and growth on a scale of one to four. A score of one indicates a minor obstacle and a score of four implies a major obstacle.

The first round of the survey was implemented in 1999 and covered 4,104 firms in 25 countries. This latest round covered 6,667 firms in 27 countries, of which 38 percent were industrial companies and 62 percent were service providers. Of the firms surveyed 67 percent were small businesses (2 to 49 employees), 19 percent were of medium size (50 to 249 employees), and 14 percent were large businesses (250 to 9,999 employees). Seventy percent of the firms in the sample were new private firms, 16 percent were privatized, and 14 percent were state-owned.