Regulatory climate sets the stage
The basic step in establishing a business friendly regulatory environment is to understand how far existing rules and procedures hold back entrepreneurial activity. This implies distinguishing between regulations that are essential for the functioning of businesses; those that are essential but can be simplified or otherwise managed more efficiently; and those that produce more costs than benefits and so should be abolished.
Making this distinction can best be achieved in three steps, says the guideline. The first step is benchmarking the national business climate against other countries. But local realities have to be factored in here. Similarly, national entrepreneurship strategies aimed at development in specific target areas, or for specific target groups, need suitable regulation for their implementation.
The second step is to look at specific sectors and regions and assess whether specific licensing or administrative requirements are justified or not. Again, benchmarking such requirements against international experiences, or between regions or sectors, may be done.
The benchmarking has to be complemented with a third step: organisation of a public-private dialogue on the costs and benefits of regulations. Such a dialogue would convey the business communities' concerns about excessive regulations and let the regulators know the costs of regulation. This will help weed out useless regulations and refine the remaining ones.
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