World Bank Doing Business report shows no major changes in Russia’s business regulation last year

BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/44

Russia ranked 51st out of 189 countries examined in the World Bank Group’s annual Doing Business report, which was released this week. Taking into account methodological changes and data revisions, Russia’s comparable ranking last year was 54th. CIS countries Georgia, Armenia, Kazakhstan and Belarus posted rankings better than Russia. EU members Greece, Luxemburg and Malta all underperformed Russia. China (84th) was nearly unchanged in the rankings.

Especially in Russia’s case, Doing Business seems to mainly reflect formal business regulation, where e.g. legislation has improved visibly over the past decade. In practice, however, companies often experience the Russian business environment very differently. Numerous surveys in recent years have noted that the main problems encountered in Russia largely have to do with capricious application of the law and the costs of corruption – factors overlooked in the Doing Business indicators. In addition, Doing Business indicators are based on very narrowly specified case studies which cannot necessarily be generalised to the overall business environment, even if it eases comparison across countries.

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