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Overview

Overview

The Investment Climate Department of the World Bank Group helps governments implement reforms to improve their business environments and encourage and retain investment, thus fostering competitive markets, growth, and job creation. Funding is provided by the World Bank Group (IFC, the World Bank, and MIGA) and donor partners working through the multidonor FIAS platform. Download the latest Investment Climate Department Factsheet.

  • Research and Diagnostics

    The World Bank Group produces several proven diagnostic tools that can be combined to create a multifaceted view of the investment climate. It is often useful to analyze the results of Doing Business (which benchmarks laws and regulations across 10 areas) and of the Enterprise Surveys (which examine firm experiences across a similar range of topics). Enterprise surveys provide the raw material for the Investment Climate Assessments (ICAs). The Business Environment Snapshots brings together relevant tools and data. Some larger economies (including India, China, Indonesia, Russia, and Colombia) have completed subnational Doing Business benchmarking assessments. Some have subnational ICAs. Other benchmarking tools include the new Investing Across Borders project and Global Investment Promotion Best Practices. Additional research on the investment climate is provided by the World Bank's Development Economics Vice Presidency.

    Financing and Guarantees

    The World Bank supports investment climate reform with sector investment loans and development policy loans. Lending for investment climate-related activities averaged $3.3 billion per year between the fiscal years 2000 and 2008. However, as a result of the global economic crisis, investment climate-related lending jumped to more than $8 billion in the 2009 fiscal year. This has largely been implemented through development policy loans with significant elements covering regulation and competition; trade facilitation and market access; support for small and medium-size enterprises, and tax administration reform. The Multilateral Investment Guarantee Agency (MIGA) supports foreign direct investment in emerging markets through political risk insurance.

  • Advisory Services

    Investment Climate Advisory Services of the World Bank Group offers client governments a range of advisory services to assist them in improving the investment climate for domestic and foreign investors. Support is provided to implement reforms that reduce unnecessary costs and risks faced by firms, strengthen fair competition, and promote investment.  Investment Climate reform work focuses on several dimensions: business taxation, business regulation, insolvency, trade logistics, alternative dispute resolution, investment policy and promotion, industry-based programs, the development of special economic zones, and public-private dialogue. Assistance is also available for a range of short-term interventions designed to address specific issues highlighted by the Doing Business indicators. In addition, the World Bank offers technical assistance through its loan products and analytic and advisory services which conduct economic and sector analyses.

    Results and Impact

    Reforming the investment climate reforms is a cost-effective way to promote private sector development and improve competitiveness. A growing body of evidence shows how reforms are strongly associated with economic growth and job creation. Our projects are designed to deliver specific types of results or milestones that are widely acknowledged among experts to contribute to larger impacts on private sector development: These results or milestones are clearly defined upfront and closely monitored during project implementation. Examples are: Was a law passed or a policy adopted in line with best practice within a particular country context? Has a change in how a business regulation is implemented—such as how firms clear customs, access capital, or pay taxes—positively affected the private sector, allowing it to create incremental economic growth?