Impact Assessment

Simplification of Business Regulations in Latvia, IFC, 1998-2004

    In 1998¿2004, the Foreign Investment Advisory Service (FIAS, a multidonor service of the World Bank Group) assisted the Government of Latvia in reducing administrative barriers to investment. This issue of the Monitor summarizes the results of a case study to track the practical connection between this FIAS project and poverty alleviation. After FIAS¿s initial study on Latvia¿s business environment, the Government assembled a series of reforms into an action plan to improve the business environment; as of 2003, 91 of 106 actions were implemented, many of them with FIAS assistance. The study found quantifiable benefits for businesses from the Government¿s reform program, and several key international indicators of the investment climate in Latvia have shown clear signs of improvement (although not all indicators did). Domestic and foreign private investment has also increased during this time, and unemployment and poverty have decreased. Because a whole range of factors¿the Government of Latvia, Latvian businesses and their associations, the EU accession process, input of many other complementary projects, market forces, as well as fortuitous timing¿have certainly played a role in Latvia¿s improving economy and reduced poverty, FIAS does not claim any particular degree of attribution for these broader improvements to its assistance to Latvia.