August 23, 2016 Print

Some of the most practical and politically possible changes are small, incremental reforms that make many people’s lives a little easier by reducing government interference in their economic activities. Lithuania has a global ranking of 20th place this year in the World Bank Group’s “Doing Business” report, an already impressively high position compared to most other countries. A recent series of regulatory reforms spearheaded by the Lithuanian Free Market Institute (LFMI), though, should be enough to move that ranking up to 15th worldwide.

“Over the past year LFMI accomplished a comprehensive research and policy advocacy program that helped to build the case and support for needed legislative and regulatory changes,” LFMI explains. “Following the release of LFMI’s research report on risk assessment and management deficiencies in construction and intensive talks with policy makers and other stakeholders, earlier this year the Lithuanian Parliament adopted a new construction legislation which incorporated five key proposals from LFMI for simplifying the procedures for getting construction permits. As a result, two excessive procedures were removed and so the number of days required for getting a construction license was cut by 33.5 days, from 103 to 69 days. These changes are expected to lift Lithuania’s construction permit ranking from the 18th to at least 7th position and the country’s overall position from the 20th to 17th place.”

Another set of LFMI proposals for accelerating electricity connection, along with its extensive advocacy campaign, reduced the number of days required from 95 to 75.

“This concerns a change in the legal provisions,” says Aneta Vaine, LFMI’s director of development and programs. “The law now sets shorter terms for granting electricity connection, so the official terms are now shorter. This will also affect enforcement. We could see from the DBI report that the maximum time officially stipulated in the law is the same as the time that is reflected in the DBI assessment. So this means that all procedures used to be carried out using the maximum allowed time. We can therefore claim that our adopted legislative amendments will bring a positive improvement not only in the law on paper, but also in practice. Even if they continue to use the maximum time, this maximum time will look much better than before, and it will look better by the number of days that we have managed to cut.”

The electricity connection reform should move Lithuania from 54th to 23rd in the world in that category, and together with the successful construction reform, Lithuania’s overall countrywide ranking should move into 15th in the world for ease of doing business.

“According to project leader Julia Simionenko-Kovacs, this huge step in fighting overregulation and excessive administrative burdens and costs would not only raise Lithuania’s global ranking,” LFMI concludes. “More importantly, shorter time limits would also increase the country’s investment attractiveness, facilitate business development planning and make public institutions more efficient.”