Transcript Diapositiva 1 - CIPE

Compare, Compete, Cooperate
How Mexican cities and states used SNDB to
improve commercial regulation
Marialisa Motta
Mierta Capaul
Luis Aldo Sanchez-Ortega
7 June 2010
1
http://subnational.doingbusiness.org
No need to go outside Mexico for good
practices
In Doing Business 2009, Mexico was ranked 56th out of 181
economies. If it were to adopt all best practices present in the
country, it would rank 29th, a 27 position drop.
►
Indicator
Best performing city
Value
Global rank
7
55
12 days
34
7.4% GNI p.c.
54
10
8
Starting a business : procedures
Nuevo León, Sinalca
Starting a business : days
Coahuila, Guanajuato, Puebla
Starting a business : cost
Campeche
Construction permits : procedures
Aguascalientes, Quintana Rao
Construction permits : time
Aguascalientes
41 days
5
Construction permits : cost
Aguascalientes
24.7% GNI p.c.
26
Registering property : procedures
Baja California, Hidalgo
4
24
Registering property : time
Coahuila, Colima
15 days
28
Registering property : cost
Aguascalientes
0.8% property value
23
Enforcing contracts : procedures
Coahuila, Colima, Durango,
Jalisco, Nayaritt, Puebla, Quintana
Rao, Sonora, Zacatecas
37
71
Enforcing contracts : time
Zacatecas
248
13
Enforcing contracts : cost
Mihoacán
19.5% claim value
46
Replicating what others do well makes a
difference
► With almost identical federal regulations, mayors and governors
have difficulty explaining why it takes longer or costs more to start a
business or registering property in their city or state versus their
neighbors.
53 days
7 days
7 days
10 days
33 days
Best practice
Guanajuato :
3 days
Best practice
Guanajuato :
0 days
12 days
Best practice
Guanajuato :
2 days
► Colima could make stating a business easier by adopting the best
practices in Mexico
Charting a new course by working together
The Doing Business in Mexico reports became a
tool to overcome the culture of confrontation
► “Governments disagreed with many aspects of the Subnational
Doing Business indicators, but now their actions were focused on
either correcting errors or re-engineering processes that would
either assimilate or surpass good practices in the indicators
measured by the Subnational Doing Business report”.
Daniel Bautista, Regulatory Reform Unit of Morelos
► “After the first Doing Business in Mexico was released in 2005:
Discussions were focused on improving business regulations rather
than philosophical debates”
Hugo Gama from the Regulatory Improvement Commission of
Michoacán
Policy recommendations guide reforms
► 28 of 31 states made it easier to start a business in Mexico in 2007-09
5
Average time to start a business fell from 36 to 24 days
From worst performer to best
reformer: The case of Queretaro
In 2006, Querétaro convened working groups with wide
stakeholder representation to propose solutions for
business regulation reforms around the Doing Business
agenda
► Universities
► Municipality
► State and federal representatives
► Chambers of commerce
► Business leaders
► Notary associations
From worst performer to best
reformer: The case of Queretaro
45
40
35
1.
2.
3.
4.
5.
6.
7.
Obtain a non-encumbrance certificate
Obtain certificate or proof of payment of water rates
Provincial
Gov. payment
Obtain a certificate or proof
of land taxes
18%real estate
Obtain property valuation of the
The notary prepares and signs the public deed
Report the transfer of title to the District Cadastre
District Government
Register the public deed in the Public Property Registry
30
7
82%
30
4
25
20
15
3
2
1
1
8
10
5
0
2005
Source: Doing Business database
2006
No changes
The pace of reform is accelerating
Number
of states
90%
31
► Reforms related to
business entry are among
the most popular in Mexican
states and municipalities.
75%
12
9 reformers
28 reformers
2005 - 2007
reformers
2007 - 2009
Non reformers
► Between 2007 and 2009,
28 of 31 states made it
easier to start a business.
Lessons learned
Lesson 1: It’s all about commitment!
► Commitment is the key to regulatory reform. Aguascalientes,
Guanajuato and Puebla are good examples of how long-term
commitment towards reform can lead to policy innovation in property
registration and reduce the time and costs of business entry.
Lesson 2: Have a credible source of information
► It is critical to have a neutral third party to move from
confrontation to cooperation. The objectivity of the Subnational
Doing Business benchmarking allowed state governments to tackle
specific reform areas.
Lessons learned
Lesson 3: Focus, focus, focus
► In order to increase competitiveness, state governments
need to design comprehensive, yet focused reform
strategies. Focus is essential, since governments lack the
capacity to fix all problems at once. Focus is one of the
most important lessons that can be drawn from the reforms
in Mexico.
Lesson 4: Build stakeholder engagement
► Business regulation reforms require state governments to
lead an intense but arm’s-length relationship with the
Doing Business in México has generated reforms in
starting a business at the 3 level of governments
-OECD
-Europe & Central Asia
-South Asia
-Middle East & North Africa
-East Asia & Pacific
-Sub-saharan Africa
-Latin America & Caribbean
2005
2006
2007
State
Drop in
time to start
a business
Days to
start a
business
Aguascalientes
20
2006
12
Guanajuato
17
12
Nuevo León
26
24
San Luis Potosí
22
19
Querétaro
33
19
Puebla
7
42
Mexico City
31
27
Coahuila
11
28
Jalisco
11
28
Yucatán
9
38
Chihuahua
6
29
… but it is not enough
-OECD
-Eastern Europe & Central Asia
-Middle East & North Africa
-South Asia
-East Asia & Pacific
-Sub-saharan Africa
-Latin America & Caribbean
State
State
State
Sinaloa
Veracruz
Distrito
Federal
Coahuila
Chiapas
Morelos
Baja
California
Oaxaca
Chihuahua
Puebla
Nayarit
Guerrero
Estado
de México
Campeche
Nuevo
León
Guanajuato
Baja
California
Tlaxcala
Quintana
Roo Sur
San Luis Potosí
Tabasco
Jalisco
Colima
Aguascalientes
Querétaro
Yucatán
Michoacán
Tamaulipas
Zacatecas
Durango
Hidalgo
Sonora
Drop in
Droptoininstart
Drop
time
time
tostart
start
time
to
a business
business
aabusiness
19
15
-1
16
17
34
9 12
13
30
21
14
1514
5
11-15
19
7-115
9
3
16
55
7
10
14
8
Days to
Days
to
Days
startto
a
startaa
start
business
business
business
2008
2008
2008
16
28
31
12
17
16
29
33
17
12
27
40
30
18
19
12
19
31
50
19
20
32
57
13
16
22
14
24
24
26
26
26
2008
2009
Lessons learned locally guide national
reforms in Mexico
► SNDB leverages TA provided by IFC to Mexico City
government
► Acts as a bridge between different levels of governments
► Provides advice on how to implement electronic platform for
company registration
► Recommends cutting duplicated requirements—registration
with statistical office
REFORM RESULTS
► Fewer procedures (from 9 to 8)
► Less time (from 28 to 13 days)
► Improvement in ranking (from 55 to 51)
Rwanda : a top reformer
SUPPORTED REFORMS
Reform memo and reform action plan for
five DB indicators
RESULTS

Ranked 67 out of 183
countries (up from 143 in
2009).

Key impacts include:
► Business Entry: Laws and regulations
changed, software for business
registration, officials of commercial
registry trained
► Trade Logistics: Interagency
cooperation improved, process
rationalized, electronic systems, risk
based inspections
► Business Taxation: Process mapping
at tax authority to improve efficiency,
independent appeals mechanism
developed
► Business Operations: Streamlined
eight priority licenses
► Inv. Facilitation: Institutional
 Newly registered companies
by month have doubled to
343 in June 2009
 time to import reduced by
37% and time to export by
10%, leading to significant
cost savings for firms.
 GIPB 2009 Report recorded
Rwanda as one of the top 25
improvers worldwide
Concrete results : Rwanda entry reform
► Number of newly registered firms up from 184 to 343 pre-post
reform.
► Entry Literature: 4-5% of the total increase in the number of firms
and 2.8% of increased employment associated to entry reforms.
Why business regulation reform matters
Easier business entry means more new firms: evidence from
business registration reforms
MEXICO
► Two microeconomic studies evaluate the impact of a reduction of
registration procedures from 8 on average to less then 3 in total, through the
introduction of One-Stop Shops and the elimination of federally required
procedures (Bruhn, 2007 and Kaplan, 2007). Results:
 Increase in the number of new firms of about 5%
 Increase in employment between 2.8 and 7%
COLOMBIA
► One microeconomic study measures the impact of the introduction of
One-Stop Shops in 6 cities (Cardenas and Rozo, 2007). Results:
INDIA Increase of 5.2% in the number of new firms
► One microeconomic study evaluate the impact of the elimination of
License Raj in 16 states over 64 industries (Aghion et al., 2005). Results:
Mexico : Ranking SNDB 2006