the ebrd-world bank business environment and enterprise performance survey (beeps iii) listening to...
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The EBRD-World Bank The EBRD-World Bank Business Environment and Business Environment and
Enterprise Performance Enterprise Performance Survey Survey
(BEEPS III)(BEEPS III)
Listening to Firms to Listening to Firms to Understand GovernanceUnderstand Governance
February 15, 2006February 15, 2006
Background on the BEEPSBackground on the BEEPS
Collaborative with Collaborative with EBRDEBRD
Collaborative Collaborative between ECA and between ECA and Enterprise Enterprise Analysis UnitAnalysis Unit
Prehistory: 1997 WDRPrehistory: 1997 WDR
19991999• 4,100 firms4,100 firms• All ECA except SAM, All ECA except SAM,
Tajikistan, TurkmenistanTajikistan, Turkmenistan
20022002• 6,600 firms6,600 firms• All ECA except All ECA except
TurkmenistanTurkmenistan
20052005• 9,600 firms9,600 firms• All ECA except All ECA except
TurkmenistanTurkmenistan
2004/20052004/2005• Germany, Greece, Germany, Greece,
Ireland, Spain, Portugal, Ireland, Spain, Portugal, Korea, Vietnam.Korea, Vietnam.
What’s New in the BEEPS?What’s New in the BEEPS? As little as possibleAs little as possible
• Identical approaches: sampling, translations, Identical approaches: sampling, translations, administration, and most questionsadministration, and most questions
Longitudinal DimensionLongitudinal Dimension• 1,500 panel firms (23-147 per country) with data for 1,500 panel firms (23-147 per country) with data for
2002 and 2005.2002 and 2005.
Manufacturing OverlayManufacturing Overlay• 1,700 manufacturing firms in Armenia, Azerbaijan, 1,700 manufacturing firms in Armenia, Azerbaijan,
Hungary, Kazakhstan, Moldova, Poland, and RomaniaHungary, Kazakhstan, Moldova, Poland, and Romania
Comparator DataComparator Data• 4,050 firms in Germany (ex-GDR and ex-FRG), Greece, 4,050 firms in Germany (ex-GDR and ex-FRG), Greece,
Ireland, Portugal, Spain, Korea, and VietnamIreland, Portugal, Spain, Korea, and Vietnam
What is Covered by the What is Covered by the BEEPS?BEEPS?
Some 400 Variables on …Some 400 Variables on …
Unofficial Payments and CorruptionUnofficial Payments and Corruption CrimeCrime Regulations and Red TapeRegulations and Red Tape Customs and TaxesCustoms and Taxes Labor IssuesLabor Issues Firm FinancingFirm Financing Legal and Judicial IssuesLegal and Judicial Issues InfrastructureInfrastructure … … others …others …
Both Subjective and Objective DataBoth Subjective and Objective Data
SubjectiveSubjective Corruption as a Corruption as a
problemproblem Assessments of Assessments of
courtscourts
Finance as a Finance as a problemproblem
Power outages as a Power outages as a problemproblem
ObjectiveObjective Spending on bribesSpending on bribes
Number of cases; Number of cases; use of courts to use of courts to collect debtscollect debts
Actual sources of Actual sources of financefinance
Actual experience Actual experience with power outageswith power outages
Selected ResultsSelected Results
Continued Improvements in Many Continued Improvements in Many Aspects of the Business Aspects of the Business
EnvironmentEnvironment
1
2
3
4
po
licy
un
cer
org
cri
me
cust
om
s/tr
ade
stre
et c
rim
e
corr
up
tio
n
tax
adm
in
bu
s li
c
hig
h t
axes
jud
icia
ry
anti
com
pb
ehav
lab
or
reg
s
1 9 9 92 0 0 22 0 0 5
Bribes are less frequentBribes are less frequent
0%
25%
50%
Eur.Comparators
EU8 EUApplicants
SEE Northern CIS Southern CISper
cen
t o
f fi
rms
ind
icat
ing
th
at b
rib
ery
is f
req
uen
t
2002 2005
Notes: The bars depict regional averages of the percentage of firms that said bribery is frequent. Regional averages are computed such that each country has an equal weight.Source: BEEPS 2002, BEEPS 2005
Corruption as a viewed as less of a Corruption as a viewed as less of a problem for firmsproblem for firms
0%
10%
20%
30%
40%
50%
60%
70%
Eur.Comparators
EU 8 EUApplicants
SEE Northern CIS Southern CIS
per
cen
t o
f fi
rms
ind
icat
ing
co
rru
pti
on
is
a p
rob
lem
do
ing
bu
sin
ess
2002 2005
Notes: The bars depict regional averages of the percentage of firms that said corruption is a problem. Regional averages are computed such that each country has an equal weight.Source: BEEPS 2002, BEEPS 2005
The magnitudes of bribes, relative The magnitudes of bribes, relative to revenues, have declinedto revenues, have declined
-
0.50
1.00
1.50
2.00
2.50
Eur.Comparators
EU8 EUApplicants
SEE Northern CIS Southern CIS
aver
age
per
cen
t o
f re
ven
ue
pai
d i
n b
rib
es 2002 2005
Notes: The bars depict regional averages of the percentage of annual revenue paid in bribes, according to firms. Regional averages are computed such that each country has an equal weight. Turkey is not included in the chart due to a change in administration of this question between 2002 and 2005.Source: BEEPS 2002, BEEPS 2005
But progress appears less even But progress appears less even when corruption is unbundledwhen corruption is unbundled
0%
5%
10%
15%
20%
Influ
en
ce L
aw
s
Util
itie
s
En
v. I
nsp
.
Occ
. H
ea
lth a
nd
Sa
fety
In
sp.
Fire
an
d B
lg I
nsp
.
Co
urt
s
Cu
sto
ms
Bu
s. L
ice
nse
s
Ta
xes
Go
v. C
on
tra
cts
av
era
ge
pe
rce
nt
of
firm
s i
nd
ica
tin
g t
yp
e o
f b
rib
ery
is
fre
qu
en
t
Source: BEEPS 2002, BEEPS 2005
Transition Countries:decrease between 2002 and 2005
Transition Countries:increase between 2002 and 2005
Transition Countries:level in 2005
Comparator Countries:level in 2005/2004
How is BEEPS Related How is BEEPS Related to Other Indicators?to Other Indicators?
Link to Investment Climate Surveys Link to Investment Climate Surveys Undertaken in Other RegionsUndertaken in Other Regions
Core questionnaire 95% the sameCore questionnaire 95% the same Sampling in ICS focuses on narrowly Sampling in ICS focuses on narrowly
defined manufacturing sectors. defined manufacturing sectors. Comparability is greatest for the Comparability is greatest for the “manufacturing overlay” countries.“manufacturing overlay” countries.• Armenia, Azerbaijan, Hungary, Kazakhstan, Armenia, Azerbaijan, Hungary, Kazakhstan,
Moldova, Poland, and Romania.Moldova, Poland, and Romania. BEEPS-style approach currently being BEEPS-style approach currently being
rolled out in other regions.rolled out in other regions.
How is BEEPS different from How is BEEPS different from aggregates (WBI and TI)?aggregates (WBI and TI)?
Aggregates use non-overlapping sourcesAggregates use non-overlapping sources Aggregates mix a variety of concepts and Aggregates mix a variety of concepts and
measure:measure:• Expert opinions and surveysExpert opinions and surveys• Corruption as experiences by firms; as experienced by Corruption as experiences by firms; as experienced by
households, expert views on impact on foreign households, expert views on impact on foreign investmentinvestment
• Can not be used to track changes over timeCan not be used to track changes over time BEEPS uses a consistent methodologyBEEPS uses a consistent methodology
• Identical questions, sampling, administration, etc.Identical questions, sampling, administration, etc.• Testing is possible using well-grounded statistical toolsTesting is possible using well-grounded statistical tools
How is BEEPS different from Doing How is BEEPS different from Doing Business?Business?
Complementary ToolsComplementary Tools• Doing Business: focus on rules and proceduresDoing Business: focus on rules and procedures• BEEPS: focus on how rules and procedures are BEEPS: focus on how rules and procedures are
implementedimplemented
Big picture is mostly consistentBig picture is mostly consistent• ECA leading reformerECA leading reformer• Mostly similar country storiesMostly similar country stories
DB highlights reforms in Georgia, Slovakia, Romania, DB highlights reforms in Georgia, Slovakia, Romania, and Latvia – all show improvement in BEEPS, as welland Latvia – all show improvement in BEEPS, as well
• Some anomaliesSome anomalies SAM is DB top reformer (but still ranked 92)SAM is DB top reformer (but still ranked 92) Croatia is ranked 118 in DB (worse than Iraq)Croatia is ranked 118 in DB (worse than Iraq)
How does the BEEPS How does the BEEPS get used?get used?
Input for Flagship StudiesInput for Flagship Studies Regional studies on Regional studies on
corruption, judicial corruption, judicial systemssystems
EBRD’s Transition Report EBRD’s Transition Report Business in TransitionBusiness in Transition
WDR 2005 WDR 2005 A Better A Better Investment Climate for Investment Climate for EveryoneEveryone
World Bank’s World Bank’s Global Global Monitoring ReportMonitoring Report
Operations and country dialogue:Operations and country dialogue:RomaniaRomania
Suggesting need for reform in 2001 ... Suggesting need for reform in 2001 ...
New Firms Suffer Most
0
0.01
0.02
0.03
0.04
Bri
bes
(as
a %
of r
even
ues)
New Entrants Privatized State Owned
Transparency and Accountability in Political Life
• Clear prohibitions on conflict of interest
• Transparency in the financing of political parties
• Income and asset disclosures for top officials
Operations and country dialogueOperations and country dialogueRomaniaRomania
Guiding content of Bank operations Guiding content of Bank operations
• Conditions on asset disclosures and Conditions on asset disclosures and conflict of interest in PAL-1conflict of interest in PAL-1
• BEEPS as benchmark indicator for BEEPS as benchmark indicator for tracking progresstracking progress
Operations and country dialogueOperations and country dialogueRomaniaRomania
… … showing progress showing progress by 2005. by 2005.
0
0.5
1
1.5
2
2.5
3
Rom SEE ECA
Bribe Tax
2002
2005
00.05
0.10.15
0.20.25
0.30.35
0.4
Rom SEE ECA
Bribe Frequency
2002
2005
0 0.1 0.2 0.3
courts
customs
fire and blgInsp
taxes
influencelaws
businesslicenses
governmentcontracts
Bribe Frequency
Rom - 2002Rom - 2005
Where Can I Find the Where Can I Find the BEEPS Results and Data?BEEPS Results and Data?
BEEPS-at-a-glance documentsBEEPS-at-a-glance documentswww.worldbank.org/eca/governancewww.worldbank.org/eca/governance
• Focus on ECA, Focus on ECA, comparisons over comparisons over timetime
• 14 pages 14 pages covering a wide covering a wide variety of issuesvariety of issues
Country profiles Country profiles rru.worldbank.org/EnterpriseSurveys/rru.worldbank.org/EnterpriseSurveys/
• Focus on world-Focus on world-wide comparisonswide comparisons
• Also 14 pages Also 14 pages covering a wide covering a wide variety of issuesvariety of issues
Interactive Feature Interactive Feature rru.worldbank.org/EnterpriseSurveys/rru.worldbank.org/EnterpriseSurveys/
• Focus on world-Focus on world-wide comparisonswide comparisons
• Custom Queries Custom Queries by size, exporter by size, exporter or importer, or importer, foreign or foreign or domestic, sectordomestic, sector
Firm-level dataFirm-level data
Greatest Flexibility and ControlGreatest Flexibility and Control
• Email James Anderson/Person/World Email James Anderson/Person/World BankBank
The EBRD-World Bank The EBRD-World Bank Business Environment and Business Environment and
Enterprise Performance Enterprise Performance Survey Survey
(BEEPS III)(BEEPS III)
Listening to Firms to Listening to Firms to Understand GovernanceUnderstand Governance
February 15, 2006February 15, 2006