INVESTMENT CLIMATE DEVELOPMENT IMPACT EVALUATION INITIATIVE

BANGLADESH INVESTMENT CLIMATE FUND

BANGLADESH

Impact Evaluation Concept Note

INNOVATIONS IN INVESTMENT CLIMATE REFORMSAN IMPACT EVALUATION WORKSHOP

PARIS, NOVEMBER 15, 2012

1

Process Mapping diagram

Assistant DirectorPrepares file and checks

Deputy Directorchecks

Directorchecks and approves

Deputy Directorsigns file

Assistant Directorprepares license

Deputy Directorchecks license

Director checks file and signs license

Deputy Director signs file

Assistant Director signs file and issues license to firm

2

Background

IFC worked with the government to Map the existing licensing processes, Analyze bottlenecks, and Implement unified licensing processes that

remove bottlenecks

The reform will affect 3 types of firms Licensed firms renewing annually Firms operating without a license that

register New firms that register

3

4

Pilot 1 launched in 3 municipalities in July

Cox’s Bazaar Hobigonj Gopalgonj

Processes

Processing Time

(Average Day)

Number of Steps

(Average)

Applicant’s number of

Contacts/Visits

(Average)Befor

e After Before After Befor

e After

Trade License Issuance (Cox’s

Bazaar, Hobigonj and Gopalgonj)

3 0.5 22 11 4 1

Trade License Renewal

( Cox’s Bazaar, Hobigonj, and

Gopalgonj)

2 0.5 21 7 3 1

Pilot 1 launched in 3 municipalities in July

5

Identify constraints to firms for trade license application

Identify triggers for formalization Impact of municipality trade

license process reform on small firms

Research Questions

6

Target Group

Immediate Effects Main Effects Long term

Effects

1) Licensed firms renewing annually

Reduced time and cost of renewing Reduced “Indirect” costs

Compliance cost savings

Job creation Investment Increased government revenue

2) Firms operating without a license that register

Time and cost of registering Reduced “Indirect” costs

Compliance cost savings Access to credit Business Growth

3) New firms that register

Time and cost of registering

Compliance cost savings Access to credit Business Growth

Government agency/ client/ municipality

Reduced internal procedures

Increased customer satisfaction

Increased government revenue (from higher collection of license fees and taxes )

Expected effects & outcomes to evaluate

7

Evaluation Method: Randomized control trial

Intervention, piloted in 3 municipalities, is to be rolled out in the remaining 312 municipalities

Evaluation Design

Cluster Size

Pilot 2 Pilot 3 Pilot 4

Trt Cntrl

Trt Cntrl

Trt Cntrl

Plan A 15 15 30 30 30 30

Plan B 75 75 - -

Plan C 30 30 45 45 -

8

Individual firms within each municipality

Matched randomization at the municipality level

Data collection Baseline Surveys Follow-up surveys Customer satisfaction surveys End consumer/market polls

Sampling and Data

9

Indicative Timeline

Dec 2012: Use

existing +collect

municipality data

March 2013:

Propensity rank for

each municipali

ty

April 2013: Form

pairs at municipality level

April 2013:

Baseline for Pilot 2

July 2013:

Randomly phase in Pilot 2

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How do we distinguish between new and formerly unlicensed firms which register?

Phasing in of the pilots considering the political economy?

Have we missed anything with respect to expected effects and outcomes (slide 6)?

Do any possible unintended consequences come to mind?

Questions for further discussion

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