The 2010 version of the Doing Business report is out, and for the first time since its first publication in 2004, a sub-saharan African country, namely Rwanda, tops the list of the reformers. And this year, more than ever, countries are taking bold reforms, notably in low-income countries. The average sub-saharan African country is still ranked low (139 out of 183 countries) but the disparity is large: Mauritius, the top performer ranks 17 (ahead of the OECD average, which is 30) but the Central African Republic ranks last at the 183th position. Rwanda tops in reforms related to ‘Employing Workers’, ‘Access to Credit’ and ‘Protecting Investors’. Between 2008 and 2009, most countries (131 out of 183) have reformed in some way or another by “making it easier to start and operate a business, strengthening property rights and improving the efficiency of commercial dispute resolution and bankruptcy procedures.” Encouragingly, the report notes, “competition among neighbors helped inspire widespread reform.”
In The Bottom Billion, Paul Collier reminds us about the importance of peer influence. On a visit to the Central African Republic, he asked government officials his usual question: “Which country would you like your country to look like in 20 years’ time?” The surprising answer was Burkina Faso, also an impoverished nation. Why not Switzerland, one could ask? Well, people compare themselves with those who are similar to them and Switzerland is way too different from the Central African Republic to serve as an example. Improvements in the business environment in Rwanda, Malawi, Tajikistan, Egypt to name but a few are very encouraging signs indeed.
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