Investment Climate and Doing Business Report's Reforms and its Impact on Women Entrepreneurship

Abstract

Every day, firms around the world face important decisions. A rural micro entrepreneur considers whether to open a small business to complement her family's farm income. A local manufacturing company ponders whether to expand its production line and hire more workers. A multinational enterprise evaluates alternative locations for its next global production facility. Their decisions have important implications for growth and poverty in each location. And their decisions will depend largely on the way government policies and behaviors shape the investment climate in those locations. A good investment climate provides opportunities and incentives for firms-from microenterprises to multinationals-to invest productively, create jobs, and expand. It thus plays a central role in growth and poverty reduction. Improving the investment climates of their societies is critical for governments in the developing world, where 1.2 billion people survive on less than $1 a day, where youths have more than double the average unemployment rate, and where populations are growing rapidly. Expanding jobs and other opportunities for young people is essential to create a more inclusive, balanced, and peaceful world. This paper examines how reforms of the regulatory business environment, investment climate inspired by the World Bank's Doing Business reports and World Bank's Word Development report 2005 - A better investment climate for everyone, impact the economic participation of women in developing countries. It focuses on gender-related impacts of four business environment reforms in areas of 1) Obtaining Credit, 2) Registering Property, 3) Starting a Business and 4) Employing Workers. The paper begins by describing the methodology of the Doing Business reports and how the suggested reforms would lead to private sector growth. Then, using an institutional economics framework, it traces women's most binding constraints in areas of credit, land titling, business startup and female employment that the Doing Business failed to capture. Discussions show how Doing Business-style reforms in the four areas mentioned create ambiguous impacts for women entrepreneurs by either leading to increased economic opportunities or reinforcing constraints and opening up areas for exploitation. The paper emphasizes mainly on impact of investment climate reforms on the women entrepreneurship.