8/11/2012: World Bank DB Report 2013: Ireland improves in headline ranking

World Bank Doing Business 2013 Indicators summary for Ireland:

Overall, Ireland's rank has improved in 2013 report compared to 2012 from 16th to 15th. The gains are as follows:

• Starting a Business rankings improved from 14th in 2012 to 10th in 2013 - a good result. The core driver, however, was not an absolute gain in scores in Ireland, but a decline in other countries rankings in this area. Thus, Number of Procedures required to start a business in Ireland remained at 4 - the same level as in every other reprot since 2004. Time (days) required to start business improved from 13 in 2007-2012 reports to 10 in 2013 report. Given there has been absolutely no new legislation or regulatory change, it is hard to explain how such a reduction was achieved. Cost as % of Income per Capita of starting business also declined from 0.4 (2011-2012 reports) to 0.3 in 2013 report. Paid-in Minimum Capital as % of income per capita has remained at zero (same as in every other report since 2004). Now, the problem is that Cost metric as used by the World Bank references GDP per capita and as such underestimates the actual cost of Starting a Business in Ireland by ca 25%. Raising the value to GNP benchmark implies a cost of 0.4%, not 0.3%, implying the ranking of 11, not 10, in 2013 table. This still represents a good achievement.
• Dealing with Construction Permits rankings for Ireland have deteriorated from 102 in the world in 2012 to 106 in the world in 2013. The deterioration occurred in Cost as % of Income Per Capita (rising from 616.9 in 2012 to 626.1 in 2013). The Number of Procedures and Time (days) metrics remained the same in 2011-2013 reports. Frankly, I have no idea what is meant by the cost of registering property at 626.1% of our income per capita.
• Getting Electricity rankings also deteriorated from 92nd in the world to 95th in the world, primarily due to Cost (as % of Income per Capita) rising from 91.1% to 94.2% between 2012 and 2013 reports. It takes on average 205 days for a new business to get an electricity connection in Ireland.
• Registering Property rankings have improved significantly in 2013 from a third-world level of 81st in 2012 report to a quasi-second world rankings of 53rd. The improvement is solely due to reduction in the cost of registering property as 5 of property value from 6.5% in 2012 to 2.5% in 2013 - a temporary measure reflecting property reliefs in Budget 2012.
• Getting Credit rankings deteriorated from 9th in 2012 report to 12th in 2013 report - the change that was driven solely by other countries improvements. Irish scores in all four categories combined in the rankings have not changed since 2005 report. Given realities of current credit environment in Ireland, the World Bank rankings in this area are basically irrelevant. The categories used in assessment are: Strength of Legal Rights, Depth of Credit Information, Public Registry Coverage and Private Bureau Coverage.
• Protecting Investors rankings for Ireland have remained at 6th in both 2012 and 2013 reports and there were no changes in the scores in any of the categories that comprise this sub-index.
• Paying Taxes rankings have slipped from 5th in 2012 to 6th in 2013 on foot of increased time required for completion (80 hours per year in 2013 report against 76 hours in all reports from 2006 through 2012). Effective profit tax entered by the World Bank for 2013 report stands at 11.9% for Ireland, while labour tax and contributions stood at 11.6% and other taxes at 2.9% combining to the total tax rate on profit of 26.4% (up on 2012 report at 26.3).
• Enforcing  Contracts rankings declined from 62nd in 2012 to 63rd in 2013 reports. On average it takes 650 days to enforce a contract in Ireland, same as in 2012, but up on 515 days registered in 2004-2011 reports.
• Trading Across Borders rankings for Ireland have deteriorated from less-than impressive 23rd in 2012 report to even more disturbing (for an open economy) 28th. The main source of deterioration was the rise of the exporting costs from USD1,109 per container to USD1,135. Given that worldwide costs of shipping came actually down in 2012, this suggests rising domestic costs.
• Resolving Insolvency rankings have improved in Ireland from 10th in 2012 report to 9th in 2013 report, primarily because the recovery rate has risen from 86.9 cents on the dollar to 87.5 cents on the dollar.

In summary, good to see an improvement in the headline ranking, but more detailed analysis shows that little is being done in terms of structural change to deliver sustained improvements in many categories.