The Argentinian think-tank Fundación Libertad recently released Índice Provincial de Desempeño Empresarial 2018 (IPDE, “Provincial Index of Business Climate”) — a study measuring the regulations that favor or hinder business activity in each of the 23 provinces of Argentina and the autonomous city of Buenos Aires. The IPDE is composed of five quantitative indicators: Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property and Fiscal Aspects. With the IPDE report taking into account different dimensions of the regulatory environment of each province, the result of the indicators can be used not only to compare the Argentine jurisdictions among themselves, but also to analyze the regulatory framework and the economic performance of each of them, and to identify the reforms that have worked (or not).
“IPDE Ranking 2018 is obtained by ordering, from highest to lowest, the scores obtained when calculating the distance to frontier for the different Argentine jurisdictions,” said Ayelén Scapuzzi Serra, economist and project coordinator of the IPDE. “For this calculation, the scores for each individual component for each economy are added through a simple average, first for each indicator, and then for all them together: Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property and Fiscal Aspects. A high ranking in the IPDE Ranking indicates a favorable regulatory environment for opening and operating a local company.”
The study was conducted as a response to the concerns of entrepreneurs and businessmen and women in Argentina about how government intervention was hurting their businesses, and by extension the economy. The IPDE facilitates comparisons of economic growth and government regulations between each of the twenty-three provinces of Argentina as well as comparisons between Argentina and other countries.
“We believe that economic activity benefits from clear and coherent rules and regulations,” continued Scapuzzi Serra. “If these rules are efficient, transparent, simple to implement, accessible, and have reasonable costs, they are much more effective in shaping the incentives of economic agents in a way that promotes economic growth, entrepreneurship and innovation.”
The IPDE presents hard data and analysis to support the case that a freer economy is a stronger economy, and that a few simple and transparent regulations facilitate the best environment for business owners.
“Promoting regulatory reforms that empower the private sector is essential for creating more jobs, attracting investments and creating more opportunities for subnational economies to prosper,” continued Scapuzzi Serra. “This report provides objective data to analyze, understand and improve the rules that regulate business activity, classifies the provinces and recommends reforms to improve the results of each of the indicators.”