Knowledge Note

How can we tell whether a legal reform brought about by IFC’s Investment Climate expertise to improve the business enabling environment is actually successful? How do we know whether we have made a difference to the business community? What is the proof that the legal reform has contributed to private sector development? How can we attribute the positive macroeconomic change such as Tax/GDP ratio to IFC’s contribution to tax-related legal reforms? Measuring results of legal reform is a highly complex endeavor, as legal reform affects multiple areas. A core expertise of IFC’s Investment Climate business line is improving a country’s business-enabling environment by reforming its laws. Unlike administrative process simplification, where the beneficiaries can be narrowed down to the exact beneficiary, with legal reform it is slightly trickier. Amendments made to a law may have a macro effect affecting several groups of stakeholders in different degrees both directly and indirectly. This SmartLesson highlights the lessons learned from the project undertaken by IFC’s Bangladesh Investment Climate Fund (BICF) to measure results from the amendments to the 1991 VAT Act which included the development of a set of guidelines on results measurements from legal reform.

About the Presenters

Syed Estem Dadul Islam

Rotbah Nitia