Improvement of regulatory environments remain at the core of efforts to unlock private sector investment and jobs, and hence crucial achieving the World Bank Group’s twin goals of ending extreme poverty and promoting shared prosperity. For the past three decades, the private sector has been at the forefront of leading economic growth and poverty reduction around the world. Enhanced private sector competitiveness has, along with integration with global markets, contributed to the unprecedented growth of many economies, such as China, Costa Rica and Vietnam. Nevertheless, a large number of developing countries – particularly poor and conflict-affected states – have yet to fully harness their economic potential. Regulatory hurdles – such as low regulatory quality, lack of transparency, and predictability – remain a key deterrent to private investments, and result in market failures, corruption, and excessive compliance costs.
By leveraging a comprehensive approach that addresses the legal, regulatory, procedural and institutional barriers affecting all phases of the investment and business lifecycle, the Bank Group’s Global Business Regulation Team helps countries establish a competitive investment climate that can attract, retain and leverage investments for business-led growth. Working through a wide range of Bank Group instruments – including advisory services and analytics (ASAs), reimbursable advisory services (RASs), and diverse lending products – to help developing countries. The offering is centered around four different focus areas:
1. Business Entry, Operation, and Regulatory Technology: The quality and enforcement of regulations make up an important cornerstone of an efficient, transparent, and predictable regulatory framework. Based on analytics, the team advises on the design of regulation governing business entry and growth, including to i) Ensure that regulation is efficient, low-risk, and fit-for-purpose to pursue policy objectives without unnecessary costs and externalities; ii) Advise on regulatory simplification, transparency, and predictability; and iii) Help to enhance transparency, accountability, accessibility, and predictability of the regulatory system ICT and other disruptive technologies across the full spectrum of the offerings.
2. Indicator-Based Reforms: Global benchmarks have put business regulation reforms on the forefront of policy-makers’ agendas and created strong demand for World Bank Group support in this area. Responding to this demand, the team provides assistance in reforming i) regulatory frameworks impacting business entry, operations and exit fueled by the Doing Business project; ii) barriers to women's economic participation, and supporting the reform of discriminatory laws and regulations as measured by the Women, Business and the Law dataset; and iii) strengthening public procurement systems to foster competition and lower costs for the government.
3. Quality Infrastructure: The team helps governments develop modern and efficient quality systems that help producers increase the quality of their products and services to compete domestically and globally. Clients are helped to identify key gaps in their quality infrastructure through a market assessment, which analyzes the existing supply and potential demand for quality assurance services, and suggests reform recommendations based on good international practices to meet such demand. This work also includes implementation support for these reforms, tailoring them to specific country conditions.
4. Regulatory Governance: The Global Business Regulation team supports client governments in improving the way regulation is created, managed and enforced. This is notably achieved by i) identification of gaps in the way rules are drawn up, enacted and enforced through diagnostics, and ii) supporting the design and implementation of Good Regulatory Practices to ensure regulations are issued, enforced and implemented in a transparent and consistent way to facilitate investment decisions. Commonly used tools are Regulatory Impact Assessment systems, public consultation mechanisms (such as Notice and Comment), and institutional oversight to ensure that new and existing rules are developed and updated consistently.
Recognizing that governments often have a small window of opportunity for reform, the World Bank Group offers a unique platform which allows the multi-facetted Global Business Regulation team to respond swiftly to client demands, and also to leveraging expertise from across the Bank Group to deliver integrated, multi-instrument solutions. The team and client governments jointly design reform programs in the context of broader competitiveness agendas; determine priority areas for reform in the short, medium and long term; set clear targets with measurable results; and strengthen the institutional capacity of public-private dialogue mechanisms and inter-ministerial reform committees.