The Ease of Doing Business Rank: An Assessment of its Macroeconomic Relevance

23 Pages Posted: 6 Jul 2016  

Vivek Moorthy

Indian Institute of Management Bangalore

A. Arul Jason

Indian Institute of Management (IIMB), Bangalore

Date Written: June 2016

Abstract

This paper examines the macroeconomic impact of World Bank’s Ease of Doing Business (EDB) rank, of increasing importance to policy makers, using simple but robust cross-country regressions. Its main findings are first that GDP per capita is negatively correlated with the EDB rank. Second, that average growth over a ten year period is negatively related to starting per capita income. It points to broad evidence linking these correlations to labour supply factors. Overall, it shows the EDB rank to have limited macroeconomic usefulness and relevance.

Keywords: Ease of Doing Business Rank, Hernando de Soto, GDP Growth, Convergence

JEL Classification: E2, E66, O17, O43, O47

Suggested Citation

Moorthy, Vivek and Jason, A. Arul, The Ease of Doing Business Rank: An Assessment of its Macroeconomic Relevance (June 2016). IIM Bangalore Research Paper No. 521. Available at SSRN: https://ssrn.com/abstract=2804921 or http://dx.doi.org/10.2139/ssrn.2804921

Vivek Moorthy (Contact Author)

Indian Institute of Management Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

A. Arul Jason

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

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