Scenario Writing Strategies for Improving Iran's Rank in the Ease of Doing Business Index

Ease of doing business (DB) is one of the well-known indices to determine whether or not the business environment of countries is optimal. The index has been published by the World Bank since 2003. The main purpose behind the DB is to develop economic activities, especially in the private sector, as well as to create a transparent and coherent legal environment for businesses to protect property rights and facilitate dispute resolution. When policymakers bind themselves to provide proposals for reform, laws, and regulations are then developed that make economic interactions more predictable, and provide merchants and traders with essential principles and information on arbitration and abuse. Such regulations will have a huge impact on stimulating people's tendencies towards economic growth and development.In Iran, the idea of improving the business environment has always been one of the principal solutions to address the country's economic problems over the past few years, provided by economists and experts. On the other hand, in recent years, many efforts have been made to improve Iran's DB rankings, but have often failed so that in recent years Iran's rank has steadily declined.

Ease of DB is one of the well-known indices of the business environment in the countries; therefore, this study aimed to present and analyze scenarios to improve Iran's overall score and ranking in the ease of the DB index.For the analysis, the DB 2019 index data obtained from all countries. Then, the data were re-formulated according to the DB methodology to determine the scores of each of the sub-indices and their criteria; and, finally, using operational research, three different scenarios were tested in excel via the Solver Command. In these scenarios, the DTF score of the ease of DB index was targeted; then the best possible outcome was achieved through the evolutionary method by modifying the specified variables and considering the constraints imposed on them.

According to the analyses, if policymakers want to improve Iran's ranking in the ease of DB index by setting a specific goal of achieving a specific ranking, then the model constraints must first be restated and/or the extent of the change in the sub-indices to be achieved for model estimation. The scenario of changing and improving rank requires applying constraints for changing criteria so that the change is made at the lowest possible cost even with the most changes in the criteria. In other words, the change in time will be less costly than a change in the number of procedures and changes in the costs themselves.However, scenarios to improve the ease of the DB index have been formulated to facilitate the possibility of modifying any of the criteria and sub-indices. As this research focuses on sub-indices starting a business, dealing with construction permits, getting to electricity, registering property, and trading across borders, only political recommendations are offered to improve the country's performance in these sub-indices.

 Accordingly, targeting the 100th rank for the country, policymakers should take the following steps to improve the overall country’s rank to the targeted number:In sub-index starting a business, the number of procedures should be decreased from 10.5 days to 6.5 days. And the time should be decreased from 72.5 days to 58.5 days.In sub-index dealing with construction permits, the number of procedures and time should be decreased by 6 cases and 45 days, respectively, and reached to 6 procedures and 85 days.In sub-index getting electricity, the number of procedures and time should be decreased by 1 case and 49 days, respectively, and reached to 5 procedures and 28 days.In sub-index registering property, the number of procedures and time decreased by 3 cases and 14 days, respectively, and reached to 3 procedures and 17 days.In sub-index trading across borders, the time to accept documents and border acceptance of exports should be decreased by 7 and 37 hours, and reached 26 and 64 hours, respectively.In general, the scenario shows that in order to reach the 100nd rank in overall index, the rankings of sub-indices starting a business, dealing with construction permits, getting electricity, registering property, and trading across borders need to be improved by 20, 63, 38, 33 and 34 positions, respectively. The above changes will also be needed for this purpose