Ease of doing business index

The ease of doing business index is an index created by Simeon Djankov at the World Bank Group. The academic
research for the report was done jointly with professors Oliver Hart and Andrei Shleifer. Higher rankings (a low numerical
value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights. Empirical
research funded by the World Bank to justify their work show that the economic growth impact of improving these
regulations is strong.
"Empirical research is needed to establish the optimal level of business regulation—for example, what the duration of court
procedures should be and what the optimal degree of social protection is. The indicators compiled in the Doing
Business project allow such research to take place. Since the start of the project in November 2001, more than 3,000
academic papers have used one or more indicators constructed in Doing Business and the related background papers by
its authors."
The ease of doing business index is meant to measure regulations directly affecting businesses and does not directly
measure more general conditions such as a nation's proximity to large markets, quality of infrastructure, inflation, or crime
A nation's ranking on the index is based on the average of 10 sub indices:

 Starting a business – Procedures, time, cost and minimum capital to open a new business
 Dealing with construction permits – Procedures, time and cost to build a warehouse
 Getting electricity – procedures, time and cost required for a business to obtain a permanent electricity connection for
a newly constructed warehouse
 Registering property – Procedures, time and cost to register commercial real estate
 Getting credit – Strength of legal rights index, depth of credit information index
 Protecting investors – Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
 Paying taxes – Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of
gross profit
 Trading across borders – Number of documents, cost and time necessary to export and import
 Enforcing contracts – Procedures, time and cost to enforce a debt contract
 Resolving insolvency – The time, cost and recovery rate (%) under bankruptcy proceeding
The Doing Business project also offers information on following datasets:

 Distance to frontier - Shows the distance of each economy to the "frontier," which represents the highest performance
observed on each of the indicators across all economies included since each indicator was included in Doing
Business
 Entrepreneurship - Measures entrepreneurial activity. The data is collected directly from 130 company registrars on
the number of newly registered firms over the past seven years
 Good practices - Provide insights into how governments have improved the regulatory environment in the past in the
areas measured by Doing Business
 Transparency in business regulation - Data on the accessibility of regulatory information measures how easy it is to
access fee schedules for 4 regulatory processes in the largest business city of an economy
Some caveats regarding the rankings and main information presented have to be considered by every user of the report.
Mainly:

 Doing Business does not measure all aspects of the business environment that matter to firm or investors, such as the
macroeconomic conditions, or the level of employment, corruption, stability or poverty, in every country.
 Doing Business does not consider the strengths and weakness neither of the global financial system, nor the financial
system of every country. It also doesn't consider the state of the finances of the government of every country.
 Doing Business does not cover all the regulation, or all the regulatory requirements. Other types of regulation such as
financial market, environment, or intellectual property regulations that are relevant for the private sector are not
considered.
The Doing Business report is not intended as a complete assessment of competitiveness or of the business environment
of a country and should rather be considered as a proxy of the regulatory framework faced by the private sector in a
country.
Human Development Index
The Human Development Index (HDI) is a statistic composite index of life expectancy, education, and per capita
income indicators, which are used to rank countries into four tiers of human development. A country scores a higher HDI
when the lifespan is higher, the education level is higher, and the GDP per capita is higher. It was developed by Indian
Nobel prize winner Amartya Sen and Pakistani economist Mahbub ul Haq, with help from Gustav Ranis of Yale University
and Lord Meghnad Desai of the London School of Economics, and was further used to measure the country's
development by the United Nations Development Program (UNDP).[2][3]

The origins of the HDI are found in the annual Human Development Reports produced by the Human Development
Reports Office of the United Nations Development Programme (UNDP). These were devised and launched by Pakistani
economist Mahbub ul Haq in 1990, and had the explicit purpose "to shift the focus of development economics
from national income accounting to people-centered policies". To produce the Human Development Reports, Mahbub ul
Haq formed a group of development economists including Paul Streeten, Frances Stewart, Gustav Ranis, Keith
Griffin, Farhan C.M, Sudhir Anand, and Meghnad Desai. Nobel laureate Amartya Sen utilized Haq's work in his own work
on human capabilities.[3]Haq believed that a simple composite measure of human development was needed to convince
the public, academics, and politicians that they can and should evaluate development not only by economic advances but
also improvements in human well-being.

The underlying principle behind the Human Development Index.[5]

Dimensions and calculation[edit]

New method (2010 Index onwards)
Published on 4 November 2010 (and updated on 10 June 2011), the 2010 Human Development Index (HDI) combines
three dimensions:

 A long and healthy life: Life expectancy at birth

 Education index: Mean years of schooling and Expected years of schooling
 A decent standard of living: GNI per capita (PPP US$)
In its 2010 Human Development Report, the UNDP began using a new method of calculating the HDI. The following three
indices are used:

1. Life Expectancy Index (LEI)

LEI is 1 when Life expectancy at birth is 85 and 0 when Life expectancy at birth is 20.
2. Education Index (EI) 2.1 Mean Years of Schooling Index (MYSI)
Fifteen is the projected maximum of this indicator for 2025.
2.2 Expected Years of Schooling Index (EYSI)
Eighteen is equivalent to achieving a master's degree in most countries.
3. Income Index (II)
II is 1 when GNI per capita is $75,000 and 0 when GNI per capita is $100.
Finally, the HDI is the geometric mean of the previous three normalized indices: