The theme of the World Bank Group's 27th annual World Development Report, available in pdf format, considers political and legal changes that must occur in order to encourage business investment in developing countries. The report draws on surveys of 30,000 firms in fifty-three developing countries to make four main points:
- The goal should be to create an investment climate that benefits not just individual businesses but society as a whole, and that firms of all types and sizes—from the small entrepreneurial business to the mega-corporation—be included.
- Improving the business climate includes, but should not be limited to, reducing business costs. Attention must also be paid to easing barriers to competition and reducing risk.
- Amendments to formal policies only go so far. Change must address the gap between the written rule and the informal practices and unwritten policies that often block business development.
- Reforms don't have to be wholesale, but progress must be continuous to give businesses the confidence to invest.
The outlook appears promising, according to the report. Economic growth and reduction of poverty in India and China are examples that "more governments are recognizing that their policies and behaviors play a critical role in shaping the investment climates of their societies."
The report, as well as the World Bank's Web site, should be of interest to scholars, NGOs, policy makers, and anyone with a business interest in developing countries.