World Bank Ranks U.S. Regulatory Burden Very Low: The Ticker

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By Paula Dwyer

The World Bank for seven years has ranked countries based on how business-friendly they are, looking at such criteria as regulatory burden and property rights protection.  The latest annual ranking, published today by the World Bank, places the U.S. at No. 4 out of 183 countries, meaning it's the fourth-friendliest nation in the world for conducting business. The study reviews 10 broad areas of business regulation, including ease of starting a company, acquiring construction permits, paying taxes, obtaining credit, conducting cross-border trades and enforcing contracts.

The U.S.'s high rank matches its grade of a year ago, despite the Obama administration's issuance of numerous new rules in response to the financial crisis and  the deregulatory policies of previous presidents.

Clocking in at No. 4 also seems to contradict complaints by business leaders and trade groups, along with their congressional allies, that the U.S.'s 9.1 percent unemployment is the result of overregulation. It also suggests that companies may be wrong when they say they can't compete globally because of burdensome rules imposed by the Dodd-Frank financial regulation law and enforcement of environmental rules.

The World Bank study, "Doing Business 2012," doesn't take into account every factor involved in running a business, including workforce skills, macroeconomic conditions and market size. But it does try to capture important aspects of a country's regulatory environment, including the ability to interact with government officials online and transparency.

The World Bank study found that African countries are the costliest for entrepreneurs, with Chad coming in dead-last of the 183 countries for overall ease of doing business. The report says 36 of 46 Sub-Saharan countries nevertheless improved the business environment. The report's data are current as of June 2011.

The top five countries remained the same as in last year's study: Singapore, Hong Kong, New Zealand, the U.S. and Denmark. The next five, to complete this year's top 10 list, are Norway, Britain, South Korea, Iceland and Ireland. China moved down four notches to 91 from 87. Morocco moved up the most, to 94 from 115, because obtaining permits for construction were made simpler.

(Paula Dwyer is a member of the Bloomberg View editorial board.)

-0- Oct/20/2011 19:51 GMT