Regulations like “rule of law and the ease of establishing a business are important basic conditions for business growth,” says Lessard. Without laws on the books – that are also enforced – it’s easy for corruption and extraofficial business dealings to take place, he says. Regulations – like Poland's move to digitize records, thus making it easier for businesses to register property, or Costa Rica's new electronic system for municipal taxes which eases compliance – can help build healthy business environments.
Back in Poland, which moved up seven spots in this year’s Doing Business rankings to No. 55, the change Weresa saw in her students’ budding entrepreneurial interests could “reflect regulatory changes in Poland that protect intellectual property and make it more inviting to start a new business,” she says.
Indeed, Eastern Europe, along with Central Asia, surpassed East Asia and the Pacific as the second-most business-friendly region this year, according to Doing Business. OECD high-income countries are considered the most business friendly, although Singapore was ranked No. 1 for the seventh year in a row. It sustained this ranking even though it made no new regulatory changes this year.
Countries in Central Asia and Eastern Europe have implemented 397 institutional and regulatory reforms since 2005, including Latvia's 2009 reform which created a way for businesses to settle insolvency issues outside of court, decreasing pressure on the legal system. The consistency of these changes could, in part, be attributed to reforms expected of countries that have entered or are trying to enter the European Union.