interventions take place in the context of wider efforts to create a social economy Whilst the relationships between social innovation and digital technologies are being
Social innovation towards a social economy The definition of social innovation is contested and the subject of an ongoing debate across
â€oesocial innovations are new solutions (products, services, models, markets, processes etc.)) that simultaneously meet a social need (more effectively than existing solutions
establish a (more) social economy. Like social innovation, the concept of a social economy has manifold meanings.
In one sense, all economies are social economies in that there is a moral sentiment between counter-parties engaging in market transactions.
The tendency to monopoly, market failure and non-optimal outcomes challenge this assumption in contemporary economies.
As a consequence, a revival of interest in social economics and the construct of social economics has emerged.
A simple definition suggests â€oethe economy is limited not to the market, but includes principles of redistribution
and reciprocity†(Laville et al. 1994 These principles suggest that increased social integration will play a central role in
establishing a social economy. We argue that both social innovation and digital technologies open up possibilities for greater social integration by addressing social needs,
and generating external network effects, respectively. Moreover, the external network effects of digital technologies are in general) accessible to actors regardless of their position in society.
wider effort to establish a social economy Social Innovation and digital technologies The literature exploring the relationships between social innovation and digital technologies
underexplored, there are extensive opportunities to engage with related bodies of knowledge to develop further understanding of these relationships.
•and the niche †sheltered environments in which innovations can develop outside the mainstream
demand for finite resources used in the manufacturing of consumer electronics (e g. rare earth metals), and adverse social impacts associated with the extractions of these resources
and communication technology (ICT) enabled or driven social and economic development, of which digitally mediated social innovation is merely one of
The economic theory, Work Foundation Degelsegger, A. & Kesselring, A. 2012. Do Nonhumans Make a Difference?
Environment and Planning-Part C, 30,381 A provisional framework for analysing relationships between social innovation and digital technologies
Opportunities and Challenges: A Report on the Research Workshop 'Digital Challenges in Innovation Research'(June 8, 2010
Economy Profile 2015 Spain 2 Spain Doing Business 2015 Â 2014 The International Bank for reconstruction and development /The World bank
The business environment...6 Starting a business...16 Dealing with construction permits...23 Getting electricity...
across 189 economies, from Afghanistan to Zimbabwe over time. The data set covers 47 economies in Sub
-Saharan Africa, 32 in Latin america and the Caribbean, 25 in East asia and the Pacific, 26 in Eastern europe and
economies. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why
This economy profile presents the Doing Business indicators for Spain. To allow useful comparison, it also
provides data for other selected economies (comparator economies) for each indicator. The data in this report are
current as of June 1, 2014 (except for the paying taxes indicators, which cover the period January†December 2013
infrastructure services (other than those related to trading across borders and getting electricity), the security of property from theft and looting, the
benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business
Second, for the 11 economies with a population of more than 100 million, data for a second city have been added
economies are Bangladesh, Brazil, China, India Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United states. Third, for getting
THE BUSINESS ENVIRONMENT For policy makers trying to improve their economy†s regulatory environment for business, a good place to start
is to find out how it compares with the regulatory environment in other economies. Doing Business provides
an aggregate ranking on the ease of doing business based on indicator sets that measure and benchmark
regulations applying to domestic small to medium-size businesses through their life cycle. Economies are ranked from 1 to 189 by the ease of doing business ranking.
This year's report presents results for 2 aggregate measures the distance to frontier score and the ease of doing
The ranking of economies is determined by sorting the aggregate distance to frontier (DTF) scores The distance to frontier score benchmarks economies
with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business
data are presented in this year†s economy profile The aggregate ranking on the ease of doing business
benchmarks each economy†s performance on the indicators against that of all other economies in the Doing
Business sample (figure 1. 1) . While this ranking tells much about the business environment in an economy, it does
not tell the whole story. The ranking on the ease of doing business, and the underlying indicators, do not measure all
aspects of the business environment that matter to firms and investors or that affect the competitiveness of the
economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business
ECONOMY OVERVIEW Region: OECD high income Income category: High income Population: 46,647, 421 GNI per capita (US$:
29,180 DB2015 rank: 33 DB2014 rank: 32 *Change in rank: -1 DB 2015 DTF: 73.17
THE BUSINESS ENVIRONMENT Figure 1. 1 Where economies stand in the global ranking on the ease of doing business
Source: Doing Business database Spain Doing Business 2015 THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy
stands in the aggregate ranking on the ease of doing business is useful. Also useful is to know how it ranks
relative to comparator economies and relative to the regional average (figure 1. 2). The economy†s rankings
figure 1. 3) and distance to frontier scores (figure 1. 4 on the topics included in the ease of doing business
and comparator economies rank on the ease of doing business Note: The rankings are benchmarked to June 2014 and based on the average of each economy†s distance to frontier (DTF) scores
The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator.
For the economies for which the data cover 2 cities, scores are weighted a population average for the 2 cities
THE BUSINESS ENVIRONMENT Figure 1. 3 Rankings on Doing Business topics-Spain Scale: Rank 189 center, Rank 1 outer edge
The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator.
For the economies for which the data cover 2 cities, scores are weighted a population average for the 2 cities
THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business tells only part of the story,
changes in an economy†s regulatory environment for firms but they are always relative Moreover, year-to-year changes in the overall rankings do
not reflect how the business regulatory environment in an economy has changed over time†or how it has changed in
different areas. To aid in assessing such changes Doing Business introduced the distance to frontier score.
measure shows how far on average an economy is from the best performance achieved by any economy on each Doing
Business indicator Comparing the measure for an economy at 2 points in time allows users to assess how much the economy†s regulatory
environment as measured by Doing Business has changed over time†how far it has moved toward (or away from) the
most efficient practices and strongest regulations in areas covered by Doing Business (figure 1. 5
The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on
THE BUSINESS ENVIRONMENT The absolute values of the indicators tell another part of the story (table 1. 1). The indicators, on their own or in
economy or those of comparator economies in the region, may reveal bottlenecks reflected in large numbers
13.8 13.4 0. 0 35.8 0. 0 0. 0 25.4 0. 0 112 Economies (0. 0
Procedures (number) 5. 0 5. 0 5. 0 3. 0 5. 0 5. 0 3. 0 4. 0 12 Economies (3. 0
Procedures (number) 5. 0 5. 0 8. 0 5. 0 4. 0 1. 0 4. 0 6. 0 4 Economies (1. 0
*Time (days) 12.0 12.5 49.0 40.0 16.0 1. 0 16.0 21.5 3 Economies (1. 0
6. 1 7. 1 6. 1 6. 7 4. 4 7. 3 0. 3 4. 6 4 Economies (0. 0
5 5 4 6 2 2 6 7 3 Economies (12 *13 Spain Doing Business 2015
7 7 6 8 7 7 6 8 23 Economies (8 *Credit registry coverage %of adults
15.3 15.6 0. 0 100.0 100.0 23.4 26.3 100.0 23 Economies (100.0 *Protecting Minority Investors (rank
*Extent of shareholder governance index (0 -10 7. 5 7. 5 7. 8 6. 8 7. 3 5. 8 7. 7 7. 3 France (7. 8
*Time to export (days) 10.0 10.0 10.0 9. 0 19.0 15.0 8. 0 8. 0 5 Economies (6. 0
12.0 12.0 11.0 15.0 12.0 14.5 12.0 11.0 5 Economies (15.0 *Note: DB2014 rankings shown are not last year†s published rankings but comparable rankings for DB2014 that capture the effects of such
recorded among all economies in the DB2015 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and
VAT or sales tax. If an economy has no laws or regulations covering a specific area†for example,
insolvency†it receives a â€oeno practice†mark. Similarly, an economy receives a â€oeno practice†or â€oenot possible†mark if regulation exists
but is used never in practice or if a competing regulation prohibits such practice. Either way, a â€oeno practice†mark puts the economy at the bottom of the ranking on the
relevant indicator *Two or more economies share the top ranking on this indicator. A number shown in place of an economy†s name indicates the number
of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website
http://www. doingbusiness. org Source: Doing Business database 16 Spain Doing Business 2015 STARTING A BUSINESS
Formal registration of companies has many immediate benefits for the companies and for business owners and employees.
several shareholders join forces to start a company Formally registered companies have access to services and institutions from courts to banks as well
as to new markets. And their employees can benefit from protections provided by the law. An additional
investments, so personal assets of the owners are not put at risk. Where governments make registration
business in an economy by recording all procedures officially required or commonly done in practice by
It also records the paid-in minimum capital that companies must deposit before registration (or
The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a
To make the data comparable across economies Doing Business uses several assumptions about the business and the procedures.
No professional fees unless services required by law Paid-in minimum capital(%of income per capita
Deposited in a bank or with a notary before registration (or within 3 months ï Has a start-up capital of 10 times income per
capita ï Has a turnover of at least 100 times income per capita ï Does not qualify for any special benefits
1 For the 11 economies with a population of more than 100 million, data for a second city have been added
Where does the economy stand today What does it take to start a business in Spain?
capital of 13.8%of income per capita (figure 2. 1). Most indicator sets refer to a case scenario in the largest
business city of an economy, except for 11 economies for which the data are weighted a population average of the
Paid-in minimum capital(%of income per capita: 13.8 Note: Time shown in the figure above may not reflect simultaneity of procedures.
economies on the ease of starting a business (figure 2. 2 The rankings for comparator economies and the regional
average ranking provide other useful information for assessing how easy it is for an entrepreneur in Spain to
and comparator economies rank on the ease of starting a business Source: Doing Business database
Economies around the world have taken steps making it easier to start a business†streamlining procedures by
financial resources and job opportunities What business registration reforms has Doing Business recorded in Spain (table 2. 1
and decreasing the minimum capital requirement DB2014 Spain made starting a business easier by eliminating the
information on business entry in that economy Following is a detailed summary of those procedures along with the associated time and cost.
Start-up Capital: 10 times GNI per capita Table 2. 2 Summary of time, cost and procedures for starting a business in Spain
share capital and complexity of the operation) and registration costs EUR 155 to EUR 300 (depending on the amount of the share capital
every economy. Where complying with building regulations is excessively costly in time and money many builders opt out.
The ranking of economies on the ease of dealing with construction permits is determined by sorting their
To make the data comparable across economies Doing Business uses several assumptions about the business and the warehouse, including the utility
economies with a population of more than 100 million, data for a second city have been added.
Where does the economy stand today What does it take to comply with the formalities to build
economy, except for 11 economies for which the data are weighted a population average of the 2 largest
economies on the ease of dealing with construction permits (figure 3. 2). The rankings for comparator
economies and the regional average ranking provide other useful information for assessing how easy it is for
Figure 3. 2 How Spain and comparator economies rank on the ease of dealing with construction permits
2013, setting the maximum price for services of the private collaborating entities for 2014 (Official Gazette of the City council of
firms in developing economies have to rely on self -supply, often at a prohibitively high cost.
ranking of economies on the ease of getting electricity is determined by sorting their distance to
data comparable across economies, several assumptions are used The warehouse ï is owned by a local entrepreneur, located
For the 11 economies with a population of more than 100 million, data for a second city have been added
Where does the economy stand today What does it take to obtain a new electricity connection
business city of an economy, except for 11 economies for which the data are weighted a population average of the
economies on the ease of getting electricity (figure 4. 2 The rankings for comparator economies and the regional
average ranking provide another perspective in assessing how easy it is for an entrepreneur in Spain to connect a
Figure 4. 2 How Spain and comparator economies rank on the ease of getting electricity
of customers is selected OBTAINING AN ELECTRICITY CONNECTION Name of utility: Iberdrola City: Madrid The procedures are those that apply to a warehouse and
customers usually contract a private firm that deals with the administrative procedure for them. This private
Most customers submit their service application to Iberdrola at the same time that they apply for the administrative approval with the Direcciã n
Customers need to obtain a license for the external works from the municipality. The taxes on this license are 4%of the cost of the works
Customers have two choices: The external connection works can be done by Iberdrola or the customer can hire a private licensed electrical
ranking of economies on the ease of registering property is determined by sorting their distance to
make the data comparable across economies several assumptions about the parties to the transaction, the property and the procedures are
2 For the 11 economies with a population of more than 100 million, data for a second city have been added
Where does the economy stand today What does it take to complete a property transfer in
business city of an economy, except for 11 economies for which the data are weighted a population average of the
economies on the ease of registering property (figure 5. 2). The rankings for comparator economies and the
regional average ranking provide other useful information for assessing how easy it is for an
and comparator economies rank on the ease of registering property Source: Doing Business database 39 Spain Doing Business 2015
Economies worldwide have been making it easier for entrepreneurs to register and transfer property†such as by computerizing land registries,
the 11 economies with a population of more than 100 million, data for a second city have been added
The ranking of economies on the ease of getting credit is determined by sorting their distance to
Where does the economy stand today How well do the credit information system and collateral and bankruptcy laws in Spain facilitate access to credit
The economy has a score of 7 on the depth of credit information index and a score of 5 on the strength of
economies on the ease of getting credit (figure 6. 1). The rankings for comparator economies and the regional
average ranking provide other useful information for assessing how well regulations and institutions in Spain
Figure 6. 1 How Spain and comparator economies rank on the ease of getting credit
indicators into context is to see where the economy stands in the distribution of scores across economies
Figure 6. 2 highlights the score on the strength of legal rights index for Spain and shows the scores for
comparator economies as well as the regional average score. Figure 6. 3 shows the same for the depth of credit
Economy scores on strength of legal rights index Note: Higher scores indicate that collateral and bankruptcy
Economy scores on depth of credit information index Note: Higher scores indicate the availability of more credit
based on detailed information collected in that economy The data on credit information sharing are collected through a survey of a credit registry and/or credit bureau
assets exist in the economy No Does the law allow businesses to grant a non possessory security right in a single category of
economy receives a score of 1 if there is a"yes"to either bureau or registry.
companies to raise the capital they need to grow innovate, diversify and compete. Effective regulations
shareholder participation in major decisions of the company and set detailed standards of accountability for company insiders
The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores
extent of shareholder governance index. To make the data comparable across economies, a case study uses
several assumptions about the business and the transaction The business (Buyer ï is traded a publicly corporation listed on the
multiple shareholders ï Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of
shareholder of the company, proposes that the company purchase used trucks from another company he owns
ï Shareholders sue the interested parties and the members of the board of directors WHAT THE PROTECTING MINORITY
Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions
profits, fines, imprisonment, rescission of the transaction Ease of shareholder suits index (0†10 Access to internal corporate documents;
Evidence obtainable during trial and allocation of legal expenses Extent of conflict of interest regulation index 0†10
and ease of shareholder indices, divided by 3 Extent of shareholder rights index (0-10.5
Shareholders†rights and role in major corporate decisions Strength of governance structure index (0 -10.5
Governance safeguards protecting shareholders from undue board control and entrenchment Extent of corporate transparency index (0-9
Extent of shareholder governance index 0†10 Sum of the extent of shareholders rights, strength of
governance structure and extent of corporate transparency indices, divided by 3 Strength of investor protection index (0†10
regulation and extent of shareholder governance indices 50 Spain Doing Business 2015 PROTECTING MINORITY INVESTORS
Where does the economy stand today How strong are minority investor protections against self-dealing in Spain?
The economy has a score of 6. 4 on the strength of minority investor protection index, with a
economies on the strength of minority investor protection index (figure 7. 1) . While the indicator does
and comparator economies perform on the strength of minority investor protection index Source: Doing Business database
the economy stands in the distribution of scores across comparator economies. Figures 7. 2 through 7. 7 highlight
the scores on the various minority investor protection indices for Spain in 2014. A summary of scoring for the
Ease of shareholder suits index (0-10 Note: Higher scores indicate greater minority shareholder access to evidence before and during trial
Source: Doing Business database 53 Spain Doing Business 2015 PROTECTING MINORITY INVESTORS Figure 7. 5 How extensive are shareholder rights
Extent of shareholder rights index (0-10.5 Note: The higher the score, the stronger the protections
Source: Doing Business database Figure 7. 6 How strong is the governance structure Strength of governance structure index (0-10.5
to disclosure, director liability, shareholder suits shareholder rights, governance structure and corporate transparency in a standard case study (for more details
see the Data Notes section of the Doing Business 2015 report). ) The summary below shows the details underlying
and/or shareholders required?(0-2 Disclosure on the transaction only 1 Must an external body review the terms of the transaction
Can shareholders sue directly or derivatively for the damage caused by the Buyer-Seller transaction to the company?(
Can shareholders hold the interested director liable for the damage caused by the transaction to the company?(
Can shareholders hold members of the approving body liable for the damage cause by the transaction to the
shareholder plaintiff?(0-1 Yes 1 Must the interested director repay profits made from the
transaction upon a successful claim by a shareholder plaintiff?( (0-1 Yes 1 Can both fines
and imprisonment be applied against the interested indrector?(0-1 Yes 1 Can a court void the transaction upon a successful claim by
a shareholder plaintiff?(0-2 Only in case of fraud or bad faith 0 Ease of shareholder suits index (0-10) 5. 0
Before filing suit, can shareholders owning 10%of the company†s share capital inspect the transaction documents
0-1 No 0 Can the plaintiff obtain any documents from the defendant Any relevant document 3
56 Spain Doing Business 2015 and witnesses during trial?(0-3 Can the plaintiff request categories of documents from the
Can shareholder plaintiffs recover their legal expenses from the company?(0-2 Yes if successful 1
Extent of shareholder rights index (0-10.5) 10.5 Can shareholders amend company bylaws or statutes with a
simple majority Yes 1. 5 Can shareholders owning 10%of the company's share capital call for an extraordinary meeting of shareholders
Yes 1. 5 Can shareholders remove members of the board of directors before the end of their term
Yes 1. 5 Must a company obtain its shareholders†approval every time it issues new shares
Yes 1. 5 are granted shareholders automatically subscription rights on new shares Yes 1. 5 Must shareholders approve the election and dismissal of the
external auditor Yes 1. 5 Can shareholders freely trade shares prior to a major corporate action or meeting of shareholders
Yes 1. 5 Strength of governance structure index (0-10.5) 5. 0 is barred the CEO from also serving as chair of the board of
directors No 0 Must the board of directors include independent board members No 0 Must a company have a separate audit committee?
Yes for listed companies 1 Must changes to the voting rights of a series or class of
shareholders upon acquiring 50%of a company Yes for listed companies 1 Is cross-shareholding between 2 independent companies
limited to 10%of outstanding shares Yes 1. 5 is barred a subsidiary from acquiring shares issued by its
Extent of shareholder governance index (0-10) 7. 5 Source: Doing Business database 58 Spain Doing Business 2015
Firms in economies that rank better on the ease of paying taxes in the Doing Business
according to the World bank Enterprise Survey research What do the indicators cover Using a case scenario,
ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier
economies, several assumptions are used ï Taxpayerco is a medium-size business that started operations on January 1, 2012
position in each economy. All the taxes and mandatory contributions paid during the second year of operation are recorded
Total tax rate(%of profit before all taxes Profit or corporate income tax Social contributions and labor taxes paid by
the employer Property and property transfer taxes Dividend, capital gains and financial transactions taxes Waste collection, vehicle, road and other taxes
yearly basis. The threshold is not based on any economic theory of an â€oeoptimal tax rate†that minimizes distortions
system of an economy overall. Instead, it is mainly empirical in nature, set at the lower end of the distribution of tax rates levied on medium-size
enterprises in the manufacturing sector as observed through the paying taxes indicators. This reduces the bias in the indicators toward economies
that do need not to levy significant taxes on companies like the Doing Business standardized case study company
Where does the economy stand today What is the administrative burden of complying with taxes in Spain†and how much do firms pay in taxes?
pay total taxes amounting to 58.2%of profit (see the summary at the end of this chapter for details.
business city of an economy, except for 11 economies for which the data are weighted a population average of the
economies on the ease of paying taxes (figure 8. 1). The rankings for comparator economies and the regional
average ranking provide other useful information for assessing the tax compliance burden for businesses in
Figure 8. 1 How Spain and comparator economies rank on the ease of paying taxes
Economies around the world have made paying taxes faster and easier for businesses†such as by consolidating filings,
Some economies simplifying tax payment and reducing rates have seen tax revenue rise What tax reforms has Doing Business recorded in Spain
economies easier is increasingly important for business. Excessive document requirements burdensome customs procedures, inefficient port
The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across
economies, Doing Business uses several assumptions about the business and the traded goods The business
For the 11 economies with a population of more than 100 million, data for a second city have been added
special environment ï Do not require any special phytosanitary or environmental safety standards other than accepted international standards
Where does the economy stand today What does it take to export or import in Spain
the largest business city of an economy, except for 11 economies for which the data are weighted a population
average of the 2 largest business cities. See the chapter on distance to frontier and ease of doing business
economies on the ease of trading across borders (figure 9. 1). The rankings for comparator economies and the
regional average ranking provide other useful information for assessing how easy it is for a business in
Figure 9. 1 How Spain and comparator economies rank on the ease of trading across borders
In economies around the world, trading across borders as measured by Doing Business has become faster and
environment and boost firms†international competitiveness. What trade reforms has Doing Business recorded in Spain (table 9. 1
small enterprises, which may lack the resources to stay in business while awaiting the outcome of a long
data comparable across economies, Doing Business uses several assumptions about the case ï The seller and buyer are located in the
economies with a population of more than 100 million, data for a second city have been added
Where does the economy stand today How efficient is the process of resolving a commercial
case scenario in the largest business city of an economy except for 11 economies for which the data are a
population-weighted average of the 2 largest business cities. See the chapter on distance to frontier and ease of
economies on the ease of enforcing contracts (figure 10.1). ) The rankings for comparator economies and the
regional average ranking provide other useful benchmarks for assessing the efficiency of contract enforcement in Spain
Figure 10.1 How Spain and comparator economies rank on the ease of enforcing contracts Source:
Doing Business database 71 Spain Doing Business 2015 ENFORCING CONTRACTS What are the details The indicators reported here for Spain are based on
quarter of the economies covered by Doing Business by judges as well COURT NAME Claim value:
By law Defendant has the opportunity to appeal the judgment during a specified period Defendant decides not to appeal.
Plaintiff retains the services of a court enforcement officer such as a court bailiff or sheriff,
sustainability in the economy overall What do the indicators cover Doing Business studies the time, cost and outcome of
central banks and the Economist Intelligence Unit In addition, Doing Business evaluates the adequacy and integrity of the existing legal framework
The index tests whether economies adopted internationally accepted good practices in four areas: commencement of proceedings
Where does the economy stand today Combination of quality regulations and efficient practice characterize the top-performing economies.
How efficient are insolvency proceedings in Spain? According to data collected by Doing Business, resolving insolvency
an economy, except for 11 economies for which the data are weighted a population average of the 2 largest
economies on the ease of resolving insolvency (figure 11.1). ) The rankings for comparator economies and the
regional average ranking provide other useful benchmarks for assessing the efficiency of insolvency proceedings in Spain
Figure 11.1 How Spain and comparator economies rank on the ease of resolving insolvency 78 Spain Doing Business 2015
Source: Doing Business database 79 Spain Doing Business 2015 Figure 11.2 Recovery Rate (0-100)- Spain
does not present rankings of economies on these indicators nor include the topic in the aggregate distance
economies, several assumptions about the worker and the business are used The worker ï Is a cashier in a supermarket or a grocery store
in the economy) with 60 employees ï Operates a supermarket or grocery store in the economy†s largest business city.
economies the data are collected also for the second largest business city ï Is subject to collective bargaining agreements if
economies that changed their labor market regulation in the past 5 years did so in ways that increased labor
doing business ranking compares economies with one another; the distance to frontier score benchmarks economies with respect to regulatory best practice
showing the absolute distance to the best performance on each Doing Business indicator. When compared
across years, the distance to frontier score shows how much the regulatory environment for local entrepreneurs
in an economy has changed over time in absolute terms while the ease of doing business ranking can show only
how much the regulatory environment has changed relative to that in other economies Distance to Frontier The distance to frontier score captures the gap between
an economy†s performance and a measure of best practice across the entire sample of 31 indicators for 10
Doing Business topics (the labor market regulation indicators are excluded. For starting a business, for example, Canada and New zealand have the smallest
economies have paid no-in minimum capital requirement (table 15.1 in the Doing Business 2015 report
economy involves 2 main steps. First, individual component indicators are normalized to a common unit where each of the 31 component indicators y (except for
on the indicator across all economies since 2005 or the third year after data for the indicator were collected for
lowest time recorded among all economies that levy the 3 major taxes: profit tax, labor taxes and mandatory
contributions, and value added tax (VAT) or sales tax. In addition, the cost to export and cost to import for each
absolute-cost indicators across economies with different inflation trends. The base year for the deflator is 2013 for
all economies In the same formulation, to mitigate the effects of extreme outliers in the distributions of the rescaled data
for most component indicators (very few economies need 700 days to complete the procedures to start a
business, but many need 9 days), the worst performance is calculated after the removal of outliers.
including time, cost, minimum capital and number of payments to pay taxes), and the 99th percentile is used
Second, for each economy the scores obtained for individual indicators are aggregated through simple averaging into one distance to frontier score, first for
which the economy has closed the gap to the regulatory frontier over time. And in any given year the score measures how far an
economy is from the best performance at that time Treatment of the total tax rate This year, for the first time, the total tax rate component
economies with a below-average total tax rate than it would have in the calculation done in previous years (line
And for economies with an extreme total tax rate (a rate that is very high relative to
economic theory of an â€oeoptimal tax rate†that minimizes distortions or maximizes efficiency in an economy†s
context of a specific economy 7 For getting credit, indicators are weighted proportionally, according to their contribution to the total score, with a weight of 60%assigned
economies that do need not to levy significant taxes on companies like the Doing Business standardized case
acknowledges the need of economies to collect taxes from firms Calculation of scores for economies with 2 cities
covered For each of the 11 economies for which a second city was added in this year†s report, the distance to frontier
score is calculated as the population-weighted average of the distance to frontier scores for the 2 cities covered
frontier scores for economies with 2 cities covered Source: United nations, Department of Economic and Social
Economy City Weight %Dhaka 78 Chittagong 22 SãO Paulo 61 Rio de janeiro 39 Shanghai 55 Beijing 45
Economies that improved the most across 3 or more Doing Business topics in 2013/14 Doing Business 2015 uses a simple method to calculate
which economies improved the ease of doing business the most. First, it selects the economies that in 2013/14
implemented regulatory reforms making it easier to do business in 3 or more of the 10 topics included in this
economies meet this criterion: Azerbaijan; Benin; the Democratic Republic of congo; CÃ'te d†Ivoire; the Czech
economies on the increase in their distance to frontier score from the previous year using comparable data
Selecting the economies that implemented regulatory reforms in at least 3 topics and had the biggest
intended to highlight economies with ongoing, broad -based reform programs. The improvement in the distance to frontier score is used to identify the top
shown by a change in rankings†that economies have made in their regulatory environment for business
Ease of Doing Business ranking The ease of doing business ranking ranges from 1 to 189
The ranking of economies is determined by sorting the aggregate distance to frontier scores, rounded to 2
How economies rank†from 1 to 189 http://www. doingbusiness. org/rankings Data All the data for 189 economies†topic rankings
studies and customized economy and regional profiles http://www. doingbusiness. org/reports Methodology The methodologies and research papers underlying
More than 10,700 specialists in 189 economies who participate in Doing Business http://www. doingbusiness. org/contributors/doing
Entrepreneurship data Data on business density (number of newly registered companies per 1, 000 working-age
people) for 139 economies http://www. doingbusiness. org/data/exploretopics/ent repreneurship Distance to frontier
Data benchmarking 189 economies to the frontier in regulatory practice http://www. doingbusiness. org/data/distance-to
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