There is a complex and extensive web of licenses and government regulations that businesses face in the course of their operations. After business formation, the environment for government regulation in, for example, zoning, construction, taxation, or safety, environment, and health standard, becomes part of the business environment that supports or discourages entrepreneurship, business entry, and enterprise formalization.
The Doing Business indicators track the procedures, time, and costs to build a warehouse, including obtaining necessary licenses and permits, completing required notifications and inspections, and obtaining utility connections.
The BizCLIR methodology digs deeper to try to understand what is driving these high overhead costs. A team of experts interview stakeholders in government, the private sector, and civil society to understand how they deal with licenses. It considers the permits, licenses, and other requirements found in the areas of business formation and operation, labor and employment, banking, real property, intellectual property, investment, and trade. These areas are evaluated using indicators divided among the four pillars:
- Legal/Regulatory Framework
- Implementing Institutions
- Supporting Institutions
- Social Dynamics
Taking this systematic approach allows us to take a 360-degree view of the business environment. For example, if Doing Business says that it takes 37 procedural steps to receive a business license in China, BizCLIR helps us understand why; it may be due to power plays between government officials, lack of efficient systems in the local offices, or because it is culturally appropriate to grant licenses only on certain days of the calendar year. BizCLIR's methodology is a qualitative investigation that offers an opportunity to understand the real problems in order for us to more efficiently determine real solutions.
