BizCLIR
In September 2002, the United States Agency for International Development (USAID) launched the “Seldon Project” for Global Trade Law Assessment and Assistance to develop and apply an assessment tool that identifies inefficiencies in the commercial laws and institutions of developing countries. By identifying key gaps between the law and implementation, the assessment tool assists governments, donor organizations, and private sector and civil society stakeholders in designing and targeting legislative, organization improvement, and capacity-building projects to maximize the effectiveness of commercial reform efforts.
In September 2006, as a continuation of the Seldon Project, USAID’s Bureau for Economic Growth, Agriculture and Trade, Office of Economic Growth commissioned support to promote improved business climates, sustained economic growth, and transformational development through reform of commercial laws, regulations, and institutional capacity-building in target countries. The vehicle for this work is the BizCLIR Project. Booz Allen supported the Seldon Project and with USAID created the methodology that BizCLIR used. The program continues to expand, offering a broad array of technical assistance services and knowledge products in addition to the diagnostic tools. Due to requests from USAID Missions and countries to address the concerns raised in the Doing Business Reports, the BizCLIR Project decided to reorganize the assessment using the topics of the Doing Business Report in order to reinforce the link between the two efforts and to enhance clarity.
The Approach
The BizCLIR Project: assesses the specific constraints within the business environment based on a set of comprehensive indicators, implements technical assistance to target these constraints, and develops/manages/shares knowledge products to share the experiences related to business environment reform.
Assessment
The BizCLIR assessment tool offers a comprehensive methodology for business environment reform using a 360-degree stakeholder assessment. The methodology considers each of the Doing Business topics at a deeper level by analyzing more than 1,000 indicators. Within each of the topics, the team evaluates four pillars of the business environment:
- Legal Framework
- Implementing Institutions
- Supporting Institutions
- Social Dynamics.
This systematic approach reflects the understanding that the business environment is a complex system with many actors, processes, and governing rules. The resulting assessment is a data-rich report for understanding the constraints to business entry, operation, and growth. Governments, donor organizations, and other stakeholders can use this framework to correct inefficiencies in the country’s laws and institutions.
This methodology allows for:
- Rapid Initiation: Within 6-8 weeks of the initial request, world-class experts are deployed for 2- 3 weeks to interview 100-150 key stakeholders
- Prompt Results: Within 6-8 weeks of the diagnostic, the assessors produce an Agenda for Action report with findings and recommendations
- Light Footprint: The logistics and scheduling are independently managed and do not require significant mission involvement
- Quick Procurement: The diagnostics do not require a new task order - USAID Missions and other US Agencies can simply add funds into the project.
Indicators
The assessment methodology is based on a comprehensive set of indicators that are grouped by the topics and pillars described above. Within each topic-pillar grouping exists a set of framework indicators and supporting indicators. Each of these indicators is simply a statement that represents a baseline requirement for a modern business environment. Below is an example framework indicator with its related supporting indicators for Starting a Business-Legal Framework:
Framework Indicator: The company law is readily available, clearly drafted, and easy to use.
| Supporting Indicator: | Copies of the law are freely available to the public and are normally found in practitioners’ offices (lawyers, accountants, etc…). |
| Supporting Indicator: | The law (or laws if there are separate laws or regulations on specific aspects such as registration) cover all subjects that a modern company law should include. |
| Supporting Indicator: | It is user-friendly - clearly drafted, well organized by subject, with a table of contents at the front, and with article headings. |
| Supporting Indicator: | It is published in all official languages of the country and there is a good English translation. |
| Supporting Indicator: | It is current and experts regularly update it. |
Each of the framework indicators are rated on a scale of one to five with one indicating a strong negative assessment and five indicating a strong positive assessment based on the guidance the many supporting indicators provide. Once the assessment is complete, the average indicator scores by topic and pillar suggest to the assessors the areas in need of greatest focus.
This method of assigning quantitative scores to qualitative indicators is not intended for cross-country benchmarking of any kind, which would be inappropriate. However, it has proven to be a highly effective mechanism to guide experts focusing on the country to the key areas of the business environment in need of attention. From a quick perusal of the scores, one can quickly identify the topics with the lowest average scores. Evaluating the underlying framework indicators quickly highlights the issues of greatest concern.
Technical Assistance
BizCLIR solutions are concrete, measurable, and based on international standards. They include a wide array of practical reform initiatives. Projects range from the development of credit bureaus to the reorganization of customs agencies to the drafting of new company laws. This technical assistance is tailored to meet the needs of the client, and, therefore, projects vary in duration, level of effort, and cost.
A clear focus on maximum knowledge transfer is built into every project through the integration of local assistance. Close consultation with the local public and private sectors is included to ensure the necessary buy-in for successful reform. Selected best practices are used to increase the impact of implementation.
Knowledge Management: Development and Sharing
While the other three components of the BizCLIR Project are actively engaging in the developing world, they generate valuable knowledge, be they country assessments, the indicator sets, or best practices from technical assistance engagements. They are dependent upon the knowledge management and development component to ensure that this information can be captured, packaged, and disseminated in an efficient manner. This website provides the hub of the knowledge management efforts where all products can be viewed and downloaded. In addition, knowledge management services can be requested for development or dissemination within a given country or region.
All of these services can be provided through the BizCLIR Project and are accessible directly by USAID missions without further procurement procedures.