This synthesis is an overview of the key topics and developments in business environment reform in 2016. It provides a summary of the key findings, research, and recommendations from BERFs work in 2016, alongside the significant developments in the wider sector.
We have identified gender; local, international and regional Business Environment Reform; Business Environment Reform in industrial sectors; and public procurement as the most important Business Environment Reform developments in 2016 based on a review of wider evidence as well as emerging demand and interest from DFID Country Offices.
Gender has become an increasingly important dimension in recent years, but 2016 was a pivotal year in establishing the tools to advocate for and design gender-sensitive programmes. The World Bank added the first gender-sensitive metrics into their global Doing Business indicators, raising the profile of gender in country programmes throughout the world. The Business Environment Working Group of the Donor Committee for Enterprise Development published guidance on gender-sensitive programmes to augment their 2008 handbook, and the UN High Level Panel on Women’s Economic Empowerment placed emphasis on the importance of business environment reform, especially for informal workers and in extending childcare provision. BERF has supported these efforts with a review of global best practice, and country-specific reports.
Local, international and regional Business Environment Reform was the theme of a new practical guide from the Donor Committee on Enterprise Development. Capacity is weakest at the sub-national level, which creates technical challenges. It is more common for corruption to frustrate the typically weaker checks and balances at this level. Local reform, however, can be swift and effective, with fewer procedural obstacles to implementation as compared with more ambitious international and national initiatives.
Regional and international programmes are inherently challenging. In most cases, real decision-making power remains at the national level, so that regional Business Environment Reform is almost impossible without supporting programmes to influence national parliaments, executives and Business Membership Organisations. BERF has received local, regional and international requests received from Country Offices in 2016, and some of the recommendations of BERF’s scoping studies reflect these different levels of engagement.
The Donor Committee also made a contribution on sectoral reform programmes. Sectoral programmes are a particularly good way to improve product standards and industry regulation. It is also noticeable that donors often choose sector-specific reform in order to underpin their own sectoral programmes, such as value chain development. While arguably led by the priorities of donors, this approach can nevertheless be a helpful means of linking Business Environment Reform to tangible objectives, such as growth of a domestic sector or securing foreign investment. BERF’s work in 2016 reflects this increased emphasis on sectoral reform. BERF produced evidence and learning notes on the constraints for specific sectors in both Mozambique and Pakistan, and the guidance produced on the Business Environment Reform Diagnostics Guide process included approaches and resources for sector specific reforms.
Lastly, public procurement has received attention from the Doing Business team in 2016, although their research has not yet been incorporated into their rankings. Since public procurement accounts for 10–25 percent of Gross Domestic Product, policy in this area has powerful potential to impact Small and Medium Enterprises. This fourth development in Business Environment Reform was only partially reflected in BERF’s 2016 work (procurement assignment for Harakat in Afghanistan), but could potentially become more of a priority in the future.