World Development Report 2005: A Better Investment Climate for Everyone

by World Bank Group

Firms and entrepreneurs of all types--from microenterprises to multinationals--play a central role in growth and poverty reduction. Their investment decisions drive job creation, the availability and affordability of goods and services for consumers, and the tax revenues governments can draw on to fund health, education, and other services. The contribution they make to society depends largely on the way governments shape the investment climate in each location-through the protection of property rights, regulation and taxation, strategies for providing infrastructure, interventions in finance and labor markets, and broader governance features such as corruption. New sources of data from the World Bank highlight how investment climates vary dramatically across as well as within countries-and hence the potential for improvement.

The World Development Report 2005: A Better Investment Climate for Everyone argues that improving the investment climates of their societies should be a top priority for governments. Drawing on surveys of nearly 30,000 firms in 53 developing countries, country case studies, and other new research, the Report explores questions such



·What are the key features of a good investment climate, and how do they influence growth and poverty?


·What can governments do to improve their investment climates, and how can they go about tackling such a broad agenda?


·What has been learned about good practice in each of the main areas of the investment climate?


·What role might selective interventions and international arrangements play in improving the investment climate?


·What can the international community do to help developing countries improve the investment climates of their societies?

In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Bank's new program of Investment Climate Surveys, the Bank's Doing Business Project, and World Development Indicators 2004 --an appendix of economic and social data for over 200 countries. Now in its twenty-seventh edition, the World Development Report offers practical insights for policymakers, business developers, economic advisers, researchers, and professionals in the media and in non-governmental organizations. It is also an essential supplement to economic and development courses in both academic and professional settings.

271 pages, Paperback

First published September 1, 2004

About the author

The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and most famous development bank in the world and is an observer at the United Nations Development Group. The bank is based in Washington, D.C. and provided around $61 billion in loans and assistance to "developing" and transition countries in the 2014 fiscal year. The bank's stated mission is to achieve the twin goals of ending extreme poverty and building shared prosperity. Its five organizations are the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).

The World Bank's (the IBRD and IDA's) activities are focused on developing countries, in fields such as human development (e.g. education, health), agriculture and rural development (e.g. irrigation and rural services), environmental protection (e.g. pollution reduction, establishing and enforcing regulations), infrastructure (e.g. roads, urban regeneration, and electricity), large industrial construction projects, and governance (e.g. anti-corruption, legal institutions development). The IBRD and IDA provide loans at preferential rates to member countries, as well as grants to the poorest countries. Loans or grants for specific projects are often linked to wider policy changes in the sector or the country's economy as a whole. For example, a loan to improve coastal environmental management may be linked to development of new environmental institutions at national and local levels and the implementation of new regulations to limit pollution, or not, such as in the World Bank financed constructions of paper mills along the Rio Uruguay in 2006.