The World Bank released its annual "Doing Business" report last week, and friends of the Obama Administration are crowing that it debunks the notion that the U.S. has become a regulatory jungle since President Obama took office. Maybe they should read it more carefully.
The report, which uses various indicators to rank 183 countries on the ease of doing business, puts the U.S. in fourth place for 2012, behind Singapore, Hong Kong and New Zealand. That's up a notch from its fifth-place finish last year, but down one from third place in 2007.
But then there are the trend lines in the sub-rankings. In 2007, the U.S. ranked third in the "ease of starting a business" category. This year it ranks 13th. On the "paying taxes" front we've dropped to 72nd place from 63rd. The cost of starting a business, measured as a percentage of per capita income, has doubled to 1.4% from 0.7% in 2007. On "ease of registering property" the U.S. has dropped to 16th from tenth. In the "trading across borders" category, we've dropped nine spots to 20th. In 2007, the "cost to import," as measured in dollars per container, was $625. Today it's more than doubled to $1,315.
The rankings are relative to the rest of the world. And it's good news that policy makers in 163 countries have made domestic regulations more business-friendly in the past six years, with the outliers being the likes of Venezuela and Zimbabwe. But that makes it all the more imperative for the U.S. to compete in a global economy that isn't sitting still. "Doing Business" is one of the few things the World Bank does well. Its message is that the U.S. needs to be doing better.
WSJ Editorial, October 28, 2011
Generally, this is a pretty positive report. We could be doing better in areas but overall we get an "A".
ReplyDeleteTo have a vibrant economy we require jobs. Small businesses are the entities that historically create those job. Making it more difficult to start a business as well as increasing the costs of doing so, should be deeply troubling and not a cause célèbre:
ReplyDelete"In 2007, the U.S. ranked third in the "ease of starting a business" category. This year it ranks 13th. ...The cost of starting a business, measured as a percentage of per capita income, has doubled to 1.4% from 0.7% in 2007."
I guess you would read the headline I just saw:
ReplyDelete7-in-10 Blame Economy for Hiring Freeze
The Obama economy is so bad that 77 percent of small business owners do not plan to hire any more workers despite all of Washington's hype that the business climate is getting better.
AS... 3 in 10 Do Not Blame Economy and that 23% do plan to hire. Continue on this path (or don't correct current position) and we'll enjoy a "pretty positive" position number 12 next time around.