1. The EBRD-World Bank Business Environment and Enterprise Performance Survey (BEEPS III) Listening to Firms to Understand Governance February 15, 2006

2. Background on the BEEPS Collaborative with EBRD Collaborative with EBRD Collaborative between ECA and Enterprise Analysis Unit Collaborative between ECA and Enterprise Analysis Unit Prehistory: 1997 WDR Prehistory: 1997 WDR 1999 1999 4,100 firms4,100 firms All ECA except SAM, Tajikistan, TurkmenistanAll ECA except SAM, Tajikistan, Turkmenistan 2002 2002 6,600 firms6,600 firms All ECA except TurkmenistanAll ECA except Turkmenistan 2005 2005 9,600 firms9,600 firms All ECA except TurkmenistanAll ECA except Turkmenistan 2004/2005 2004/2005 Germany, Greece, Ireland, Spain, Portugal, Korea, Vietnam.Germany, Greece, Ireland, Spain, Portugal, Korea, Vietnam.

3. What’s New in the BEEPS? As little as possible As little as possible Identical approaches: sampling, translations, administration, and most questionsIdentical approaches: sampling, translations, administration, and most questions Longitudinal Dimension Longitudinal Dimension 1,500 panel firms (23-147 per country) with data for 2002 and 2005.1,500 panel firms (23-147 per country) with data for 2002 and 2005. Manufacturing Overlay Manufacturing Overlay 1,700 manufacturing firms in Armenia, Azerbaijan, Hungary, Kazakhstan, Moldova, Poland, and Romania1,700 manufacturing firms in Armenia, Azerbaijan, Hungary, Kazakhstan, Moldova, Poland, and Romania Comparator Data Comparator Data 4,050 firms in Germany (ex-GDR and ex-FRG), Greece, Ireland, Portugal, Spain, Korea, and Vietnam4,050 firms in Germany (ex-GDR and ex-FRG), Greece, Ireland, Portugal, Spain, Korea, and Vietnam

4. What is Covered by the BEEPS?

5. Some 400 Variables on … Unofficial Payments and Corruption Unofficial Payments and Corruption Crime Crime Regulations and Red Tape Regulations and Red Tape Customs and Taxes Customs and Taxes Labor Issues Labor Issues Firm Financing Firm Financing Legal and Judicial Issues Legal and Judicial Issues Infrastructure Infrastructure … others … … others …

6. Both Subjective and Objective Data Subjective Corruption as a problem Corruption as a problem Assessments of courts Assessments of courts Finance as a problem Finance as a problem Power outages as a problem Power outages as a problemObjective Spending on bribes Spending on bribes Number of cases; use of courts to collect debts Number of cases; use of courts to collect debts Actual sources of finance Actual sources of finance Actual experience with power outages Actual experience with power outages

7. Selected Results

8. Continued Improvements in Many Aspects of the Business Environment

9. Bribes are less frequent

10. Corruption as a viewed as less of a problem for firms

11. The magnitudes of bribes, relative to revenues, have declined

12. But progress appears less even when corruption is unbundled

13. How is BEEPS Related to Other Indicators?

14. Link to Investment Climate Surveys Undertaken in Other Regions Core questionnaire 95% the same Core questionnaire 95% the same Sampling in ICS focuses on narrowly defined manufacturing sectors. Comparability is greatest for the “manufacturing overlay” countries. Sampling in ICS focuses on narrowly defined manufacturing sectors. Comparability is greatest for the “manufacturing overlay” countries. Armenia, Azerbaijan, Hungary, Kazakhstan, Moldova, Poland, and Romania.Armenia, Azerbaijan, Hungary, Kazakhstan, Moldova, Poland, and Romania. BEEPS-style approach currently being rolled out in other regions. BEEPS-style approach currently being rolled out in other regions.

15. How is BEEPS different from aggregates (WBI and TI)? Aggregates use non-overlapping sources Aggregates use non-overlapping sources Aggregates mix a variety of concepts and measure: Aggregates mix a variety of concepts and measure: Expert opinions and surveysExpert opinions and surveys Corruption as experiences by firms; as experienced by households, expert views on impact on foreign investmentCorruption as experiences by firms; as experienced by households, expert views on impact on foreign investment Can not be used to track changes over timeCan not be used to track changes over time BEEPS uses a consistent methodology BEEPS uses a consistent methodology Identical questions, sampling, administration, etc.Identical questions, sampling, administration, etc. Testing is possible using well-grounded statistical toolsTesting is possible using well-grounded statistical tools

16. How is BEEPS different from Doing Business? Complementary Tools Complementary Tools Doing Business: focus on rules and proceduresDoing Business: focus on rules and procedures BEEPS: focus on how rules and procedures are implementedBEEPS: focus on how rules and procedures are implemented Big picture is mostly consistent Big picture is mostly consistent ECA leading reformerECA leading reformer Mostly similar country storiesMostly similar country stories DB highlights reforms in Georgia, Slovakia, Romania, and Latvia – all show improvement in BEEPS, as well DB highlights reforms in Georgia, Slovakia, Romania, and Latvia – all show improvement in BEEPS, as well Some anomaliesSome anomalies SAM is DB top reformer (but still ranked 92) SAM is DB top reformer (but still ranked 92) Croatia is ranked 118 in DB (worse than Iraq) Croatia is ranked 118 in DB (worse than Iraq)

17. How does the BEEPS get used?

18. Input for Flagship Studies Regional studies on corruption, judicial systems Regional studies on corruption, judicial systems EBRD’s Transition Report Business in Transition EBRD’s Transition Report Business in Transition WDR 2005 A Better Investment Climate for Everyone WDR 2005 A Better Investment Climate for Everyone World Bank’s Global Monitoring Report World Bank’s Global Monitoring Report

19. Operations and country dialogue: Romania Suggesting need for reform in 2001... Suggesting need for reform in 2001...

20. Operations and country dialogue Romania Guiding content of Bank operations Guiding content of Bank operations Conditions on asset disclosures and conflict of interest in PAL-1Conditions on asset disclosures and conflict of interest in PAL-1 BEEPS as benchmark indicator for tracking progressBEEPS as benchmark indicator for tracking progress

21. Operations and country dialogue Romania … showing progress by 2005.

22. Where Can I Find the BEEPS Results and Data?

23. BEEPS-at-a-glance documents www.worldbank.org/eca/governance Focus on ECA, comparisons over timeFocus on ECA, comparisons over time 14 pages covering a wide variety of issues14 pages covering a wide variety of issues

24. Country profiles rru.worldbank.org/EnterpriseSurveys/ Focus on world- wide comparisonsFocus on world- wide comparisons Also 14 pages covering a wide variety of issuesAlso 14 pages covering a wide variety of issues

25. Interactive Feature rru.worldbank.org/EnterpriseSurveys/ Focus on world- wide comparisonsFocus on world- wide comparisons Custom Queries by size, exporter or importer, foreign or domestic, sectorCustom Queries by size, exporter or importer, foreign or domestic, sector

26. Firm-level data Greatest Flexibility and Control Greatest Flexibility and Control Email James Anderson/Person/World BankEmail James Anderson/Person/World Bank Or janderson2@worldbank.orgOr janderson2@worldbank.org

27. The EBRD-World Bank Business Environment and Enterprise Performance Survey (BEEPS III) Listening to Firms to Understand Governance February 15, 2006