Business Enabling Environment
The poverty-alleviating capacity of economic growth depends on healthy businesses that can produce the goods, services, jobs and tax revenues needed for a healthy economy. USAID works with developing countries and countries in transition to identify and reduce the barriers that keep businesses from flourishing.
Businesses of all sizes must balance the costs and risks of their operations with revenues earned from selling goods and services. The business enabling environment encompasses the many factors that affect business profitability. USAID helps countries lower the costs and risks of doing business by improving the enabling environment through a wide range of assistance, related to upgrading commercial legal systems and improving business regulation.
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| Streamlined licensing in Jordan reduce the costs of doing business for firms of all sizes. |
Upgrading Commercial Legal Systems
When legal systems unnecessarily restrict economic freedoms, growth decreases and poverty increases. USAID helps governments, private sector associations and non-governmental organizations improve the commercial legal system, by reforming laws, revising policies, and ensuring implementation capacity.
Improving Business Regulation
The role of government in the economy is to facilitate commerce while guarding against abuses. Proper business regulation protects both society and business. USAID aids reformers in improving the regulatory environment in part through the World Bank’s Doing Business program, which benchmarks regulation and provides important information and incentives for reform.
USAID also works to help partner countries
- Enhance their institutional capacity - USAID promotes development of diverse and healthy institutions as a fundamental component of a healthy business environment, which depends on courts that enforce rights, government agencies that enforce policies, and private sector organizations that can act as watchdogs and advocates of reform.
- Understand social dynamics – Recognizing the dynamic relationships between actors and institutions helps policy makers reach intended benefits. USAID ensures a more level playing field for all by addressing issues such as legal empowerment of the poor, empowering business women leaders, and the distortionary impact of vested interests. Moreover, we recognize that building better relationships between government and private sector is vital to improving the business enabling environment.
Our projects and programs for a better business enabling environment are complex, but the goal is simple: enhancing growth while reducing poverty.
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