Taking Care of Business: Looking at the Business Climate in 18 Cities in Poland

If you were a small business owner in 2009 who was interested in registering a new property in Warsaw, Poland you could expect to wait 197 days to complete this task. If you were thinking of perhaps building a new property for this business, your expected wait time for a construction would have been 308 days.

Fast forward five years and you now find a drastically different business climate. Today, the average time necessary to register a property now stands at a drastically reduced 35 days, while the expected wait for a construction permit has been nearly halved, down to 161 days. These improvements have helped local businesses thrive in the country, steadily pushing Poland up in the annual Doing Business report - from 72 in 2010 to 45 in 2014.

While these improvements in ranking illustrate the large economic strides that Poland has made in recent years as it continues on its path of convergence with the European Union, their limited scope also forces them to paint a picture as it exists only in Warsaw and not the country as a whole - businesses and entrepreneurs living outside of the nation’s capital to merely speculate about the actual ease of doing business in their respective communities.

With the recent announcement of a subnational Doing Business launch, however, this situation is now set to change. In approximately one year from now, a Polish entrepreneur interested in learning about the business climate outside of Warsaw will also be able to find out how much time he or she can expect to start a business or register a property. A small business owner in Lublin will have information about enforcing a contract and an entrepreneur can learn about dealing with construction permits in Opole by turning to the data from the  Doing Business in Poland report, expected to be released in the Spring of 2015.  

“Thanks to our research, companies and local authorities will have first-hand, reliable information,” noted co-author and World Bank Economist Marcin Piatkowski in a recent interview following the announcement of this new report. 

The Doing Business in Poland study is being commissioned by the Ministry of Infrastructure and Development and Bank Gospodarstwa Krajowego (BGK) and is the latest in the doing business series in Europe.

The report will go beyond Warsaw and study business regulation from the perspective of a small to midsize domestic firms across 18 cities in Poland, capturing local differences in regulations or enforcement at the subnational level and highlighting good practices that can be replicated in different cities throughout Poland. Four indicators will be used to formulate these findings: starting a business, dealing with construction permits, registering property and enforcing contracts.

This work emulates work that has been carried out in places similar to Poland – countries that are decentralized and where local regulations and local implementation of national regulation has an impact on the local business environment. Similar reports have been carried out in 355 cities in 55 countries – including the recent Doing Business in Italy. This report found large regulatory differences from one city to another and uncovered good practices that could be leveraged to empower local entrepreneurs and Italian SMEs.

Experts and officials in Poland are hopeful that similar outcomes will emerge from the work being conducted in Poland. Starting in April, the team will begin collecting, analyzing, and coding data, with the aim of using this data to draft a report over the course of the year. The report will provide data on the ease of doing business in the selected areas, rank each city, and recommend reforms to improve the business climate at the local level in each regulatory area. This data will also enable peer-to-peer learning between those cities measured.

“The main purpose of the Subnational Doing Business studies is to shine the light on what is working and what can be improved upon within the areas measured,” notes Xavier Devictor, World Bank Manager for Poland and the Baltic countries. “We hope that this Subnational Doing Business study will empower policymakers with the right information to inform their policies, enable cross city and voivodeships lesson sharing, and help improve the local business regulatory environment.”

The final report is expected to be made available in March 2015.