The DCED defines the business environment as a complex of policy, legal, institutional, and regulatory conditions that govern business activities. It is a sub-set of the investment climate and includes the administration and enforcement mechanisms established to implement government policy, as well as the institutional arrangements that influence the way key actors operate (e.g., government agencies, regulatory authorities, and business membership organisations including businesswomen associations, civil society organisations, trade unions, etc.).
Along with other private sector development initiatives, the business environment affects the performance of private enterprises in both the formal and informal economies. Business environment reform promotes the development of markets that encourage competition and enhance the effectiveness and sustainability of other development interventions. Many agencies consider a conducive business environment as one of the pre-requisites for economic growth and poverty reduction [DCED, 2008].
DCED Inter-Agency Database on Business Environment Reform
The DCED maintains an inter-agency database on business environment reform at www.business-environment.org which was established to share information about donor-supported work to enhance the enabling conditions for pro-poor growth. Today, you can find hundreds of technical documents on the database, organised by different programme phases, as well as overarching research and synthesis documents. The database also contains all case studies and other materials generated by the four conferences organised by the DCED’s Business Environment Reform Group to inform the development of the Donor Guidance document.
On this page you can find all of the DCED’s own key publications on Business Environment Reform, including guidance on issues ranging from business formalisation, quality infrastructure reform, political economy analysis and measuring results.
Practical guidance on supporting business environment reforms (2008)
In 2008, the DCED published “Supporting Business Environment Reforms. Practical Guidance for Development Agencies” (“Yellow Book”). Versions in different languages and supporting materials can be downloaded below.
- BE Practical Guidance in English
- BE Practical Guidance in French
- BE Practical Guidance in Spanish
- BE Practical Guidance in Arabic
Donor guidance annexes
Supporting Local and Regional Business Environment Reforms
This Annex to the Practical Guidance on Supporting Business Environment Reform (BER), published by the DCED in 2016, focuses how donor and development agencies can support Business Environment Reforms at local and regional levels.
Supporting Business Environment Reforms within Industry Sectors
This Annex to the Practical Guidance on Supporting Business Environment Reform (BER), published by the DCED in 2016, focuses how donor and development agencies can support Business Environment Reforms within industry sectors.
Gender and Business Environment Reform
This Annex to the Practical Guidance on Supporting Business Environment Reform (BER), published by the DCED in 2016, focuses on the theme of how donor and development agencies can implement gender sensitive business environment reform programmes. The Paper on which it is based can be downloaded from the following Section.
Supporting quality infrastructure in developing and transitional economies
This Annex to the Practical Guidance on Supporting Business Environment Reform, published by the DCED in 2014, synthesises key lessons on how donor agencies can support the development of the Quality Infrastructure in developing and transitional economies.
Measuring Business Environment Reform
This Annex to the Practical Guidance on Supporting Business Environment Reform (BER), published by the DCED in 2013, focuses on how to measure donor-supported BER results.
- Annex of the Practical Guidance on Measuring BER
- Sample List of Indicators for Business Environment Reform Programmes
How BER can be complemented with industrial policy support
This Annex to the Practical Guidance on Supporting Business Environment Reform (BER), published by the DCED in 2013, focuses on how BER can be complemented through industrial policy support.
How BER can promote formalisation
This Annex to the Practical Guidance on Supporting Business Environment Reform (BER), published by the DCED in 2011, focuses on how BER can address the informal economy and encourage the formalisation of informal enterprises.
- Annex of the Practical Guidance on Formalisation in English
- Annex of the Practical Guidance on Formalisation in French
- Annex of the Practical Guidance on Formalisation in Spanish
Country-Level reviews of donor support to Business Environment Reform (2011)
In 2010, the DCED initiated a pilot project to review donors’ programmes and practices in support of BE Reform. Three countries were chosen: Kenya, Bangladesh and Rwanda. The report below presents findings from the first review.
- Review of Donor-Supported BER Programmes and Practices in Kenya (2010)
- Review of Donor Supported BER Programmes and Practices in Bangladesh (2011)
- Review of Donor Supported BER Programmes and Practices in Rwanda (2011)
- Comparative Report: 51 Lessons Donor and Development Agencies Supporting BER (2011)
Other DCED publications on BER
In addition to the Practical Guidance on BER and related annexes, the DCED Business Environment Working Group has also published other papers and reports on the theme, often as a basis for guidance development. These are listed below.
- Gender-Sensitive Business Environment Reform: Why does it matter? – A policy guide, 2017. This guide by Katherine Miles for the BEWG sets out the relevance of considering gender in business environment reform interventions; the relationship of gender-sensitive BER to women’s economic empowerment; and how donors can implement gender-sensitive BER interventions.
- Case Study: Advancing Women’s Financial Inclusion through Gender-Sensitive BER, 2017. This case study by Katherine Miles for the BEWG provides an overview of the business environment constraints to women’s financial inclusion. Furthermore, it highlights examples of gender-sensitive business environment reform interventions that have addressed the direct and indirect business environment constraints to women’s financial inclusion and details their approaches, success factors and lessons learned.
- Case Study: Gender-Sensitive BER and Informality, 2017. This case study by Katherine Miles for the BEWG provides an overview of the business environment constraints for women entrepreneurs in formalizing their business activity. Given the higher concentration of women’s economic participation within the informal sector relative to their overall labour market participation, formalization can enhance their income generation and asset accumulation, as well as their agency.
- How to create an enabling environment for inclusive business? Learning from experience and debates in private sector development, 2016. How can agencies help create an enabling environment for inclusive business in partner countries? And how, if at all, does this differ from regulatory reform and policies to facilitate private investment in general? In order to help answer these questions, this scoping paper summarises a very large body of emerging evidence, structuring it into key debates for further exploration. The paper takes a global perspective, incorporating lessons from the inclusive business literature as well as other communities of practice in private sector development (PSD).
- A Review of Donor Agency Support for Regional and Local Business Environment Reform – This Paper, written by Simon White and published in 2016, reviews donor and development agency experiences in supporting BER at regional (i.e., supra-national territories) and local (i.e., subnational territories) levels. It identifies the advantages and disadvantages of such approaches, as well as identifying good practices and lessons learnt.
- Gender and Business Environment Reform – This Paper, written by Katherine Miles and published in 2016, outlines the factors in the business environment that have a direct impact on women-owned and managed enterprises, and the employment of women. It also describes lessons from programmes, for DCED members to identify, measure and manage gender in BER.
- Supporting Sector-Focused Business Environment Reform in Developing Countries – This Paper, written by Simon White and published in 2015, aimed to better understand how agencies are supporting reforms in specific industry sectors: Pharmaceuticals, Renewable Energy, Mining Sector (and small-scale suppliers), and Horticulture. Common issues identified included policy frameworks, legal reform, regulatory authorities, Standards and QA, and institutional arrangements.
- Leveraging the Impact of Business Environment Reform: The Contribution of Quality Infrastructure. Lessons from Practice, 2015 – This technical report, written by Martin Kellermann and Daniel Paul Keller, offers an in-depth analysis of key lessons on how donor agencies can support the development of the Quality Infrastructure in developing countries, which is a key component of the business environment.
- Case Studies on the Measurement of Donor-Supported Business Environment Reform Results – This paper, written by Simon White and published by the DCED in 2013, contains four brief case studies concerning the measurement of business environment reform results across regional trade support, tax reform, business advocacy and public-private dialogue, and improving the regulatory framework for business registration and company formation.
- Strategic Industrial Policy and Business Environment Reform: Are they Compatible? – This paper, written by John Weiss and published by the DCED in 2013, addresses the compatibility of business environment reform and industrial policy approaches, and makes recommendations to donors on how industrial policy can be applied. The paper draws on examples from four countries.
- The Political Economy of Business Environment Reform: An Introduction for Practitioners – This paper, published by the DCED in 2011, considers how political economy issues affect donors’ efforts to support business environment reform, and suggests ways which practitioners can address these issues. The paper draws on examples from four countries.
- French summary of the above paper by the Gret association
- Business Environment Reforms and the Informal Economy – In 2009, the DCED commissioned a discussion paper on Business Environment Reforms and the Informal Economy, written by Professor Clifford Zinnes.
- French summary of the above paper