The World Bank’s impact evaluation blog, Development Impact, has just blogged about our new paper introducing innovative impact evaluation techniques to measure the impact of private sector reforms. Check out the blog here.
The paper is called “Innovative Techniques to evaluate the impact of private sector reforms: An application to Rwanda and 11 other countries” and uses Rwanda’s one-stop shop as its main case study. In particular, we find that the impact of Rwanda’s one-stop shop on new business registration was 186% in its first year of operations!
The paper will be presented at the Mid-West Political Science Association (MPSA) Conference in Chicago on April 13th.
"The Gathani et al. paper therefore should be a useful how-to read for many people trying to measure the impact of national-level policy changes."
- David McKenzie, Lead Economist, Development Research Group, World Bank
The objectives of this paper are twofold: (1) to show how the synthetic control methodology can be used to measure the impact of private sector development reforms, and (2) to introduce a new technique, the proximity control methodology, that offers similar advantages but greater flexibility than the synthetic control methodology to test the validity of results. While maintaining the technical rigor of other econometric techniques used to conduct impact evaluations, these two methods are quicker cost- effective alternatives that can be applied to measure ex-post the impact of policy reforms in a given country or region. They can also easily be replicated to similar reforms in other countries. We illustrate this by using both methodologies to estimate the impact of the introduction of a one-stop shop for business registration on new firm creation in Rwanda and 11 other countries. Both approaches yield similar and comparable results and show that one-stop-shops can have a very large impact: in Rwanda for example, we observe a 186% average increase in new firm creation after the reform was introduced, in Tajikistan a 132% increase, and in Belarus a 103% increase. In this paper we also propose a new way of looking at the Doing Business dataset by introducing a measure of the similarity of the business environment of a pair of countries. This metric offers a more accurate comparative representation of a country’s business environment than more traditional metrics.