Overview

The business enabling environment (BEE) includes norms and customs, laws, regulations, policies, international trade agreements and public infrastructure that either facilitate or hinder the movement of a product or service in a market. At one end of the spectrum, conventions, treaties, agreements and market standards shape the global business enabling environment. The business enabling environment at the national and local level encompasses policies, administrative procedures, enacted regulations and the state of public infrastructure. In addition to these more formal factors, social norms, business culture and local expectations can be powerful aspects of the business enabling environment.

Every day an entrepreneur spends filling out paperwork or in line at a government office is a day not making sales or finding new customers. Burdensome and unpredictable regulation is costly both in terms of the time and money required for compliance as well as an opportunity cost. In many countries, these costs are substantial. A growth-oriented small businessperson faces a choice: comply with regulations and incur costs so high that they jeopardize the business’s viability or try to survive in the informal sector without bank credit or enforceable contracts and at constant risk of harassment from authorities. Reform of the BEE can result in substantial benefits for an economy including faster growth, less unemployment, more gains from trade, greater formalization, reduced poverty, less corruption and lower budget deficits.