World Bank: Regulations Do Not Stifle US Economy
The World Bank released their ninth annual "Doing Business" report on Wednesday which ranks 183 countries in different aspects of the business model and determines how “business-friendly” they are.
With the economic downturn in the U.S. many politicians have been trumpeting the idea that taxation and regulations have a stranglehold on businesses in the country, thus hindering the market’s ability to recover. The World Bank’s findings, however, dispute that claim.
Among the 183 countries, the U.S. ranks number four in the “ease of doing business category,” trailing New Zealand (3), Hong Kong (2) and Singapore (1). Therefore, based on this report there seems to be less red tape and less hassle for businesses to settle in the U.S. than there is for all of Europe, Latin America, Africa and most of Asia.
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America’s ranking has remained the same since last year, despite numerous business regulations imposed by the Obama administration. This high ranking goes against businesses’ and many GOP politicians’ claims that the current 9.1 percent unemployment is the cause of overregulation. U.S. businesses appear not to be too burdened by the enforcement of new rules.
Forbes Magazine issued an editorial statement vindicating regulations as being the culprit to the sour economy, saying:
“The U.S. economy is suffering because of a combination of historic deleveraging, lackluster support from fiscal policy makers in Washington, and a general, yet pervasive, lack of business confidence. The U.S. economy is not suffering because of taxes, energy policy, or Obamacare as data and polls have shown consistently.”
However, it isn’t all smiles for the U.S. The country slid to number 13 this year in the “best place to build a start-up business,” which is down two slots from last year.
Overall though, things are looking positive for businesses worldwide. About 125 countries were found to have implemented 245 reforms since last year in order to be more business friendly. This is up 13 percent from the previous report.
Morocco was the big winner, moving up 21 spots to 94. This jump is because obtaining permits for construction was made easier.
The report studies 11 general areas of business regulation including ease of starting a company, acquiring construction permits, paying taxes, obtaining credit, conducting cross-border trades and enforcing contracts. The data and rankings are used to “analyze economic outcomes and identify what reforms of business regulation have worked, where and why.”
