2007年-世界发展银行全球_Show_Me_the_Money_Quantifying_the_Impact_of_Regulatory_Simplification_Projects_7页_369kb

Summary of "SHOW ME THE MONEY!" - Quantifying the Impact of Regulatory Simplification Projects

Core Content

This document outlines a methodology developed by IFC's Private Enterprise Program (PEP) to quantify the economic impact of regulatory simplification projects on businesses in Eastern Europe and Central Asia. The approach focuses on measuring cost savings and profit increases resulting from reforms, using a combination of baseline surveys, official data, and SME feedback.

The methodology is based on adapting techniques from OECD countries and is designed to work in environments with limited and unreliable data. It distinguishes between direct costs (administrative and labor costs) and indirect (opportunity) costs (revenue loss due to time spent on administrative procedures or temporary business closures).

Main Objectives

The primary goals of IFC PEP's Business Enabling Environment (BEE) Regulatory Simplification Projects include:

• Diagnostics and monitoring through regular SME surveys
• Streamlining 2–3 key administrative procedures (e.g., business registration, licensing, inspections)
• Advocacy with governments and the private sector to promote reforms
• Increasing legal awareness among SMEs regarding administrative procedures

Key Aspects of the Methodology

Direct Costs

Direct costs are calculated using the following formula:

$$
D = (D 1 + D 2) * (1 - t)
$$

Where:

• D1 = Administrative costs = $ n * (P_O + P_U) $
  • $ n $: Number of times a procedure is undertaken annually
  • $ P_O $: Official payments
  • $ P_U $: Unofficial payments (estimated as a percentage over official payments)
• D2 = Labor costs = $ w * d $
  • $ w $: Daily average employee salary
  • $ d $: Full-time equivalent working days spent on procedures
• $ t $: Average profit tax rate

Indirect (Opportunity) Costs

Indirect costs are calculated based on the time saved from administrative procedures and the associated revenue impact:

• I1: Delay in business entry
  $$
  I_1 = \Pi_s * \frac{d}{d_t}
  $$

  • $ \Pi_s $: Average annual net profit of start-up companies
  • $ d $: Average time spent in a procedure
  • $ d_t $: Average number of working days per year

• I2: Temporary closure of business activity
  $$
  I_2 = L * (1 - t) * \frac{s}{d_t}
  $$

  • $ L $: Average annual losses for a company that is temporarily closed
  • $ s $: Average number of days a company is closed due to procedures

The methodology uses net profits (after taxes) as the primary indicator of cost savings, as it better reflects the actual benefits to businesses and allows for aggregation of impact across the SME sector.

Key Findings

• IFC PEP has estimated that regulatory simplification projects in its focus countries have led to aggregate cost savings of $84 million for businesses.

• In Uzbekistan, the BEE project has resulted in $39 million in aggregate cost savings for the SME sector through the implementation of 8 normative acts.

• The project has improved procedures such as:

  • Suspension of enterprise activity only by court decision
  • Simplified reporting systems
  • Introduction of termless licenses and cancellation of certain permits
  • Streamlined business registration and inspection processes

• The methodology is conservative and focuses on short-term (static) economic effects, as long-term (dynamic) impacts, such as changes in market structure, are difficult to quantify due to data limitations.

Lessons Learned

1. Surveys are essential: They provide firm-level data necessary for accurate impact assessment and verification.
2. Data limitations are significant: Estimates are conservative due to scarcity and inaccuracy of data, especially from government sources.
3. Use of reasonable assumptions: It is important to clearly state assumptions and distinguish between direct and indirect costs to ensure transparency.
4. Aggregate cost savings should be expressed as ranges: This accounts for uncertainty, though precise figures are often preferred by stakeholders.
5. Project staff must understand the methodology: Integration of data collection into daily project activities is critical for effective impact measurement.

Future Directions

• IFC PEP aims to incorporate ex-ante analyses to improve cost-effectiveness assessments in future projects.
• There is a need to expand the methodology to include government net revenues as a metric, which is currently limited by data availability.
• The approach can be used as a tool to engage and motivate stakeholders to support regulatory reforms.

Uzbekistan BEE Project Example

• SECO Funding (2001–2007): $1,666,750
• 8 normative acts implemented: Streamlined inspections, tax reporting, permit and license issuance, and business registration
• Aggregate cost savings: ~$39 million
• Direct savings: ~$13.4 million
• Indirect savings (profits): ~$25.9 million

The project used a baseline survey in 2001 to measure the initial burden of inspections and has since tracked changes through subsequent surveys, confirming improvements in procedure efficiency and reduced abuse.

Authors

• Sanda Liepina: Senior Operations Manager at IFC PEP, with experience in regulatory reform in CEE and CIS countries.
• Andrea Dall'Olio: Manages the Tajikistan BEE Project, focusing on inspections and administrative burdens.
• Sanwaree Sethi: Oversees Monitoring and Evaluation activities at IFC PEP.
• Approving Manager: Tania E. Lozensky, General Manager, IFC PEP

Disclaimer

The findings and conclusions expressed in this document are those of the authors and do not necessarily reflect the views of IFC or its partner organizations. The methodology is part of the IFC SmartLessons program, which shares lessons learned in development-oriented advisory services.