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Despite strong economic growth in recent decades led by the resource-based sectors, Lao PDR facessignificant challenges, including high poverty rates and limited productivity. A highly challenging business and investment environment continues to hamper stronger private sector-led growth, especially outside the natural resource sectors, where job creation could be larger. In the still largely unreformed business and trade environment, the World Bank's 2016 Enterprise Survey identified "practices of firms in the informal sector" as the biggest problem reported by firms in the country, and addressing these and other challenges fundamentally will be critical to generate inclusive growth. Based on interviews with business owners and top managers, this note finds that there are four main types of problematic informality in Lao PDR's business environment: inadequately registered enterprises that "fly under the radar"; widespread tax evasion; irregular adherence to complex and burdensome regulations; and a culture of noncompliance with basic rules and standards. Fully registered and formalized firms incur higher costs and feel unfairly targeted by authorities who are eager to collect revenue and fulfil their mandates. Unregistered or rule-evading competitors are alleged to escape the same level of scrutiny, due to the difficulty of enforcement and prevalence of petty corruption. Tackling problematic informality in the business environment will require stronger institutions and a continued government focus on eliminating petty corruption. In the near-term, this note recommends eliminating unnecessary regulations and streamlining others by leveraging public support for transparency and consistency in the tax and regulatory systems. This should be complemented by a functional, efficient one stop window for enterprise registration to encourage formalization. Putting these recommendations into practice will require improved monitoring, evaluation, and assessment practices based on reliable and timely common data.

Corporate Governance and Corruption --- Enterprise Development and Reform --- Microenterprises --- Private Sector Development --- Public Sector Development

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During the 1990s, the Turkish economy was beset by frequent economic crises. Fiscal imbalances, high inflation rates, and the subsequent stop and go economic cycles hit the Turkish economy, slowing growth and plunging the country into recession. Spiraling debt and interest payments coupled with failures in financial systems resulted in significant financial crises in late 2000 and early 2001. The Government of Turkey initiated a number of economic reforms to contain spending, cut its deficit, reduce inflation, and provide a basis for renewed economic growth. The Government has mapped out a structural reform program encompassing measures to address the biggest sources of fiscal deficits, strengthen the legal and regulatory frameworks, and accelerate the privatization of the remaining state enterprises. Reform of the Turkish State Railways (TCDD) is one of the main targets for change. Over the past few decades, TCDD has fallen into a financial crisis from which it will not be able to emerge without a dramatic restructuring of its governance and organization. TCDD operates the state railway, the seven largest ports, and manufactures and repairs locomotives, wagons and passenger coaches. As an enterprise, TCDD is the largest money loser among Turkey's public sector enterprises.

Enterprise Development & Reform --- Ports --- Private Sector Development --- Privatization --- Railways --- Railways Transport --- State-Owned Enterprises --- Transport

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Environmental and social responsibility is becoming more and more important in today's global economy. There are thousands of environmental and social codes and standards in the world today. The codes and standards define the rules and the objectives. An environmental and social management system helps companies to integrate the rules and objectives into core business operations through a set of clearly defined, repeatable processes. The authors provide tools to build or enhance the company's environmental and social management system (ESMS), such as sample documents, blank forms, flowcharts, checklists, and templates. For more publications on IFC Sustainability please visit www.ifc.org/sustainabilitypublications.

Corporate Governance --- Corporate Social Responsibility --- Emergency Preparedness --- Enterprise Development & Reform --- Private Sector Development

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This paper studies the effects of a reform in Serbia that transferred business registration from regional courts to a centralized agency. Using administrative data, the analysis employs a difference-in-difference strategy that compares new firms before and after the reform across districts based on the level of distrust in regional courts. The results suggest that the reform increased the number of new firms more in regions with higher initial levels of distrust, by up to 34 percent. The reform also increased the survival rates of new firms. These effects are large compared to those of other types of registration reforms, suggesting that courts can pose significant barriers to new firm creation.

Business Registration Reform --- Courts --- Enterprise Development & Reform --- Firm Creation --- Private Sector Development

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Firm capabilities-the abilities and practices to operate and innovate-are considered important drivers of firm performance. While the analysis of their importance is well established in developed countries, its study in the African context is more recent. The paper uses a new representative sample of enterprises in Mozambique comprising data on management and organizational practices, as well as skills, to study the importance of firm capabilities in Mozambique. The analysis suggests that the private sector in Mozambique scores below other developing countries in all dimensions of firm capabilities. Enterprises engaging in more contractual relationships demonstrate stronger firm capabilities. Firm capabilities are key drivers of performance; controlling for other input factors, firms in Mozambique with better firm capabilities perform better. The relationship is robust to various measures of performance and to including various firm and manager characteristics. The analysis finds that for smaller firms, non-exporters, and female-owned enterprises, their gap in business performance can be explained by differences in management practices. The results suggest Mozambique should explore mechanisms of expanding firm capabilities in targeted types of firms.

Business in Development --- Enterprise Development --- Enterprise Development and Reform --- Firm Capability --- Firm Performance --- Innovation --- Management Practices --- Organizational Management --- Private Sector Development --- Private Sector Economics --- Small and Medium Size Enterprises