| Code | IC.DCP.BQC.XD.015.DB1619 |
| Indicator Name | Building quality control index (0-15) (DB16-20 methodology) |
| Long definition | The building quality control index is the sum of the following six indices: quality of building regulations, quality control before construction, quality control during construction, quality control after construction, liability and insurance regimes and professional certifications. The component indicator is computed based on the methodology in the DB16-20 studies. |
| Source | World Bank Group, Doing Business project (http://www.doingbusiness.org/). |
| Topic | Dealing with construction permits |
| Periodicity | Annual |
| Reference period | Data are presented for the survey year instead of publication year. |
| Statistical concept and methodology | Data are collected by the World Bank Group with a standardized questionnaire that uses a simple business case to ensure comparability across economies and over time—with assumptions about the legal form of the business, its size, its location and nature of its operation. Questionnaires are administered to more than 13,800 local experts, including lawyers, business consultants, accountants, freight forwarders, government officials and other professionals routinely administering or advising on legal and regulatory requirements.
The Doing Business data are based on a detailed reading of domestic laws, regulations and administrative requirements as well as their implementation in practice as experienced by private firms. The report covers 190 economies—including some of the smallest and poorest economies, for which little or no data are available from other sources. The data are collected through several rounds of communication with expert respondents (both private sector practitioners and government officials), through responses to questionnaires, conference calls, written correspondence and visits by the team. Doing Business relies on four main sources of information: the relevant laws and regulations, Doing Business respondents, the governments of the economies covered and the World Bank Group regional staff. |
| Development relevance | Good construction regulation matters for public safety since sound regulation of construction helps protect the public from faulty building practices. Efficient construction permitting and inspection systems can indeed strengthen property rights and contribute to the process of capital formation. If procedures are too complicated or too costly, builders are more likely to proceed without a permit, especially in developing economies. And because the construction permitting process generally involves licensing requirements from several different agencies, those seeking permits are exposed to different bureaucracies, which creates opportunities for rent-seeking. Overly complicated or costly construction rules can also increase opportunities for corruption. |
| Limitations and exceptions | The Doing Business methodology has five limitations that should be considered when interpreting the data. First, for most economies the collected data refer to businesses in the largest business city and may not be representative of regulation in other parts of the economy. Second, the data often focus on a specific business form—generally a limited liability company (or its legal equivalent) of a specified size—and may not be representative of the regulation on other businesses. Third, transactions described in a standardized case scenario refer to a specific set of issues and may not represent the full set of issues that a business encounters. Fourth, the measures of time involve an element of judgment by the expert respondents. When sources indicate different estimates, the time indicators reported in Doing Business represent the median values of several responses given under the assumptions of the standardized case. Finally, the methodology assumes that a business has full information on what is required and does not waste time when completing procedures. In practice, completing a procedure may take longer if the business lacks information or is unable to follow up promptly. Alternatively, the business may choose to disregard some burdensome procedures. For both reasons the time delays reported in Doing Business would differ from the recollection of entrepreneurs reported in the World Bank Group Enterprise questionnaires or other firm-level questionnaires. |
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