The DCED defines the business environment as a complex of policy, legal, institutional, and regulatory conditions that govern business activities (DCED, 2008). It is a sub-set of the investment climate. Business environment reform (BER) aims to reduce the costs and risks of business activity by improving poor government policies, laws and regulations, and by stimulating competition through new market entrants. The DCED Business Environment Working Group have produced the following video introducing the approach:
At a glance: Short reads on Business Environment Reform
- Policy brief: Creating Better Business Environments for Micro and Small Enterprises, 2019. Four-page brief summarising the findings of a review of the theory and practice on MSE-oriented business environment reforms.
- Policy brief: Policies that Promote SME Participation in Public Procurement, 2018. Four-page brief summarising the various models of preferential treatment of SMEs in public procurement as well as their impacts and lessons learnt.
- Policy brief: Business Environment Reform and Labour Productivity, 2018. Four-page brief exploring the ways that BER can contribute to labour productivity improvements as well as good practices and policies in this field.
- Summary: How to create an enabling environment for inclusive business, DCED, 2017 : Two-page summary of the DCED’s extensive review of experience and evidence in this area.
DCED publications
DCED members are working through the Business Environment Working Group (BEWG) to review experience and develop good practice guidance on key aspects of BER. A full list of DCED publications on BER is available here. This section lists the Top 5 most downloaded BEWG resources during the last year.
- Technical report: Creating Better Business Environments for Micro and Small Enterprises, 2018. Presents the results of a survey of donor and development agencies on their views and experiences in MSE-oriented business environment reform.
- Working paper: How to create an enabling environment for inclusive business? Learning from experience and debates in private sector development, 2016. Summarises a large body of evidence on the theme, structuring it into key debates for further exploration.
- Study report: Business Environment Reform and Investment Promotion, 2019. Explores ongoing donor and development agency support in the area of BER and investment promotion and facilitation, and analyses its effectiveness in promoting private investment, both FDI and domestic investment.
- Guidance: Supporting Business Environment Reforms. Practical Guidance for Development Agencies, 2008. Seminal guidance consolidating donor agencies’ views on key principles of BER as well as contested issues.
- Study report: Promoting Economic Transformation through Business Environment Reform, 2019. Examines what Economic Transformation is and how BER might promote it, as well as providing current practices, challenges, and practical implications for donors.
Key overview documents
- What Works in Business Environment Reform in Sub-Saharan Africa and South Asia, BERF, 2017. Provides lessons on what works in BER design and programming, including conditions for starting a BER programme, and design and sequencing options in different political contexts.
- How Business is Done in the Developing World: Deals versus Rules, Hallward-Driemeier and Pritchett, 2015. Compares findings of de jure Doing Business and de facto Enterprise Surveys; ‘variance across firm responses in the same country is typically much larger than the variances in actual median compliance times across countries.’
- Is there a causal link between investment climate and growth? A review of the evidence, LASER, 2015. Reviews the evidence on role of the investment climate for economic growth and adequate sequencing of reforms, including in fragile and conflict-affected environments.
- Business environment reform and poverty: rapid evidence assessment, DFID, 2015. Finds that BER contributes to poverty reduction mainly due to indirect rather than direct effects.
- Business Environment Reform and Investment Promotion and Facilitation: Rapid Evidence Assessment, DFID, 2015. Reviews the impact of business environment reform on investment and the effectiveness of linking business environment reform and investment facilitation services.
- Assessing the impact of regulatory reform in developing countries, Colin Kirkpatrick, 2014. Summarises the empirical evidence on the impact of regulatory reform in developing countries.
- The Impact of the Business Environment on the Size of the Micro, Small and Medium Enterprise Sector. Preliminary Findings from a Cross-Country Comparison, Erick Rocha, 2012. Assesses how the regulatory environment influences the size and job contribution of the SME sector in a country.
Business Environment Reform and complementary approaches
- The enabling environment for private sector development. Donor spending and links to other catalytic uses of aid, Devinit, 2018.
- Policies that Promote SME Participation in Public Procurement, DCED, 2017.
- Strategic Industrial Policy and Business Environment Reform: Are they Compatible?, DCED, 2013.
- Competition policy: Encouraging thriving markets for development, The World Bank Group, 2013.
- Trade Costs: What Have We Learned? A Synthesis Report, OECD, 2013.
Different areas of Business Environment Reform
This section lists practical resources by various agencies on selected key areas of business environment, as defined in the DCED’s donor guidance on BER support.
Overarching tools and guidelines
- The Business Environment Reform Diagnostic (BERD) Process: Guidance for Consultants, BERF, 2016.
- Reducing Red Tape. A facilitation and management manual, GTZ and Mesopartner, 2010.
Simplifying business registration and licensing ![]()
- Legislative Guide on Key Principles of a Business Registry, UNCITRAL 2019
- Business Registration: What do we know about the effectiveness of business registration support and reforms? Key studies referenced in the DCED Evidence Framework, DCED, 2017.
- Formalisation of smallholder agriculture and agri-business, BERF, 2016.
- Studies on business formalisation compiled by the World Bank Doing Business Initiative
Improving tax policies and administration
- Enhancing the Effectiveness of External Support in Building Tax Capacity in Developing Countries, IMF, OECD, UN and World Bank Group, 2016.
- Reforming business taxes. What is the effect on private sector development?, The World Bank Group, 2011.
- Tax Compliance Cost Surveys Using data to design targeted reforms, World Bank, 2010.
- Studies on paying taxes compiled by the World Bank Doing Business Initiative
Enabling better access to finance
- What’s happening in the missing middle? Lessons from financing SMEs, The World Bank Group, 2017.
- Access to Finance for Small and Medium Enterprises in Africa, The World Bank and ACET, 2016.
- Bank Financing to Small and Medium Enterprises in East Africa: Findings of a Survey In Kenya, Tanzania, Uganda and Zambia, AFDB, 2012.
- Scaling-Up SME Access to Financial Services in the Developing World, IFC, 2010.
- Studies on access to credit and protection of minority investors compiled by the World Bank Doing Business Initiative
Improving labour laws and administration
- Business Environment Reform and Labour Productivity, DCED, 2017.
- Barriers to Job Creation and Labour Market Access for Youth in Sub-Saharan Africa, BERF, 2017.
- Working Conditions, Work Outcomes, and Policy in Asian Developing Countries, ADB, 2016.
- Studies on labour market regulations compiled by the World Bank Doing Business Initiative
Improving land titles, registers and administration
- Land Sector Reforms in Ghana, Kenya and Vietnam: A Comparative Analysis of Their Effectiveness, Peter Narh et al, 2016.
- The Impact of Land Property Rights Interventions on Investment and Agricultural Productivity in Developing Countries: A Systematic Review, Steven Lawry et al., 2014.
- Studies on registering property compiled by the World Bank Doing Business Initiative
Improving access to commercial courts and alternative dispute resolution
- Alternative dispute resolution for businesses in developing countries, GSDRC, 2014.
- Settling out of court: How effective is alternative dispute resolution, The World Bank Group, 2011.
- Studies on enforcing contracts compiled by the World Bank Doing Business Initiative
Enhancing public-private dialogue
- PublicPrivateDialogue.org (multi-agency website compiling practical guidelines, case studies and more)
- Making Business Membership Organisations Work for the Poor. Case Study of ENABLE Nigeria, The Springfield Centre and Adam Smith International, 2016.
Cross-cutting issues
Political Economy
- Political Economy Analysis of the Business Environment in 11 Middle Income Countries, Duncan and Kingsmill, 2018
- Adaptive programming in practice: shared lessons from the DFID-funded LASER and SAVI, DFID, 2016.
- Delivering institutional reform at scale: Problem-driven approaches supported by adaptive programming, DFID, 2016.
- Investment Climate Reform: Doing it Differently What, Why and How, LASER, 2015.
- Corruption and the Private Sector: A review of issues, EPS PEAKS, 2013.
- Systems Change in the Business Enabling Environment, DFID, 2012.
- The Political Economy of Business Environment Reform: An Introduction for Practitioners. DCED, 2011.
Gender and BER![]()
For more resources on gender and BER including case studies, please refer to the DCED’s Women’s Economic Empowerment webpage.
- Women, Business and the Law 2018, World Bank, 2018.
- Scoping Study on Customary Law and Women’s Entrepreneurship, BERF, 2017.
- Scoping Study on Gender Differences in Enterprise Surveys, BERF 2017.
- Business Environment Reform and Gender, Technical paper, DCED BEWG 2016.
Implementing BER in Fragile and Conflict-Affected Contexts
- Operational Experience of Business Environment Reform Programming in Fragile and Conflict-Affected States, BERF, 2017.
- Scoping Study on Business Environment Reform in Fragile and Conflict Affected States, BERF, 2016.
Measuring Results in BER
- An Impact Assessment of OHADA Reforms; Uniform Acts on Commercial, Company, Secured Transactions, and Insolvency, IFC/OHADA 2018
- External Review of Enabling the Business of Agriculture, ITAD/DFID 2018
- How to Measure Value for Money in DFID Business Environment and Investment Climate Reform Initiatives Delivered by the IFC: An Evidence and Learning Note, BERF, 2016.
- Investment Climate Reforms : An Independent Evaluation of World Bank Group Support to Reforms of Business Regulations, IEG, 2015.
- Measuring Business Environment Reform, DCED 2013. There is also an associated Sample list of indicators.
Country diagnostics
- World Bank Group Data Site on trade and competitiveness TCdata360 by the Macroeconomics, Trade and Investment Global Practice, 2018
- Business environment diagnostics and other studies in 14 countries are available on the DFID archive site for the Business Environment Reform Facility (BERF)
- Enabling the Business of Agriculture, The World Bank, 2017. (compares national laws and regulations for agribusiness)
- World Bank Doing Business Reports
- World Bank Enterprise Surveys