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5.2.10. The BizCLIR Tool Framework

Introduction

The BizCLIR assessment methodology reviews selected business enabling environment through four “lenses” – four dimensions: the legal framework, implementing institutions, supporting institutions, and social dynamics

Legal Framework: How closely do existing laws reflect international best practices? How well do they respond to the realities of the country’s economic indicators?  Do embedded incentive structures track with economic objectives? 

Implementing Institutions: How well do implementers and enforcers carry out their duties in terms of efficiency, transparency, and predictability? Do institutional behaviors create barriers to participation and predictability?

Supporting Institutions: How deeply rooted in Civil Society are the laws and institutions that govern commercial pursuits?  Do the many needed individual components of the system exist, and if so, do they work together efficiently?

Social Dynamics: How well does the legal system respond to users’ evolving needs?  How receptive to change are the key stakeholders?  What forces or factors govern the pace and direction of change in the system?

The following topical areas of the business enabling environment are assessed via the four dimensions described above:

  • Starting a Business
  • Dealing with Licenses
  • Access to Credit
  • Trading Across Borders
  • Registering Property
  • Protecting Investors
  • Employing Workers
  • Paying Taxes
  • Enforcing Contracts
  • Closing a Business


People from all aspects of the business environment are interviewed, including members of the private sector, government, nongovernmental associations and academia. We interview these “key informants” based loosely on the key informant methodology1 frequently used in the social sciences. The information derived from these interviews is reported both qualitatively and quantitatively.

Interviews for the BizCLIR diagnostic are organized in a standardized but non-random manner. Consultants knowledgeable of local policy and private sector networks arrange meetings with diverse actors in the economy who can inform our analysis of the business environment. We find and meet people that have known insights on their community or who maintain a particularly influential role in the community to ensure rich and detailed data are collected to inform reports to provide programmatic support for clients and to inform local governments, donors and others interested in the business enabling environment within an economy.

BizCLIR Indicators

A set of “indicators” is used in all BizCLIR reports. Each indicator acts as proxy for an attribute deemed essential to development in a given area of the business enabling environment. Each of these “attributes” is scored based on our ranking system described below. BizCLIR indicators are a mix between expert opinion and fact-based findings. In the former, BizCLIR indicators quantify expert opinions on various aspects of the business environment where the quality of the data depends on the expertise brought to bear by the assessment team. In the latter, assessors are responsible for researching and scoring BizCLIR indicators based on the best available information. These scores provide a baseline understanding of how a country fares according to “expert analysis” and provide a quick and easy way to diagnose where problems (or strengths) exist in core legal, regulatory, institutional or social areas. For example, the indicator below comes from the Getting Credit section. A score of 1-5 is given to each “Key Question” based on the criteria set out in the sub or “supporting” questions.

BizCLIR indicators produce ordinal data. That is, the indicator scores represent a classification of answers from highest to lowest based on a continuum where a five is the best possible scenario and one the worst. Ordinal data allow for comparisons (much like the A through F grading system) but do not offer the level of precision necessary to quantify the level of difference between categories.

Indicator scores are used to assist interested readers in understanding relative strengths and weaknesses of a given area of the business environment for the private sector. In all cases, indicator scores should be considered in conjunction with the written analysis provided in each diagnostic report. The score awarded each key indicator aligns with the following conclusions as they relate to specific questions that constitute each indicator:

1 = strong negative

2 = moderate negative

3 = neutral (or having some negative and some positive qualities)

4 = moderate positive

5 = strong positive

Shows sample diagnostic questions on a score card.

Following an assessment, we create a scorecard that is useful in prioritizing areas for reform and, potentially, to track progress over time. This scorecard can be used to help design programs by highlighting areas that are particularly deficient or by showing which elements of the business enabling environment are worthy of particular praise or replication.

Footnotes

1. See MN Marshall, “The Key Informant Technique” Fam. Pract. 13: 92-97, 1996