Description: The following map shows how the legal rights index (0=low to 12=strong) varies across countries. The nuance of the country corresponds to the size of the indicator. The darker the shade, the higher the value. The country with the highest value in the world is Azerbaijan with a value of 12.00. The country with the lowest value in the world is São Tomé and Principe with a value of 0.00. Development relevance: Access to finance can increase opportunities for all, as access to and use of banking services is higher, combined with fewer barriers to financing for individuals and businesses. A stable financial system that encourages efficient savings and investment is also crucial for a prosperous democracy and market economy. Access to financial services involves several aspects: availability, cost and quality of services. The development and growth of credit markets depends on access to timely, reliable and accurate data on borrowers` credit experiences. Access to credit can be improved by facilitating the preparation and enforcement of collateral agreements and by improving information on the creditworthiness of potential borrowers. Lenders look at a borrower`s credit history and collateral. Where credit registries and effective collateral laws are lacking – as in many developing countries – banks lend less. Indicators that cover borrowing include the legal rights strength index and the credit depth index.
A country`s economic health is measured not only in macroeconomic terms, but also by other factors that influence day-to-day economic activity, such as laws, regulations and institutional arrangements. The data measure corporate regulation, measure regulatory outcomes, and measure the extent of legal protection of property, the flexibility of employment regulation, and the tax burden on businesses. The basic premise of this data is that economic activities require good rules and regulations that are effective and accessible to all who need to use them, and easy to implement. For example, sometimes there is more emphasis on increased regulation, such as stricter disclosure requirements for related-party transactions, and sometimes more emphasis is placed on simplified rules, such as a one-stop shop for starting a business. Business owners may not know all the necessary procedures or avoid the procedures required by law altogether. But where regulation is particularly heavy, the level of informality is higher, which comes at a price: informal sector firms tend to grow more slowly, have less access to credit, and employ fewer workers – and these workers remain outside the protection of labor laws. The indicator can help policymakers understand a country`s business environment and, together with information from other sources such as World Bank business surveys, provide insight into potential areas for reform. Statistical concept and methodology: Data is collected by the World Bank using a standardized survey that uses a simple business case to ensure comparability across economies and over time – with assumptions about the legal form of the company, its size, location and the nature of its activities. Investigations are conducted by more than 9,000 local experts, including lawyers, business consultants, accountants, freight forwarders, government officials and other professionals who regularly manage or advise on legal and regulatory requirements. The World Bank`s Doing Business project includes two types of data: data from reading laws and regulations, and data on time and movement indicators that measure effectiveness in achieving a regulatory goal.
In the time and movement indicators, cost estimates from official fee schedules can be recorded. Survey data are subjected to numerous robustness tests, which lead to a revision or expansion of the information collected. For more information on the methodology, see www.doingbusiness.org/Methodology/getting-credit#legalRights. Definition: The Legal Strength Index measures the extent to which guarantees and bankruptcy laws protect the rights of borrowers and lenders, thereby facilitating lending. The index ranges from 0 to 12, with higher scores suggesting that these laws are better designed to expand access to credit. More maps: Africa | Asia | Central America and the Caribbean | Europe | Middle East | North America | Oceania | South America | | Source: World Bank, Doing Business Project (www.doingbusiness.org/).
