Variations in investment climate have recently received close attention from policy makers, in particular regarding the explanation for differences in economic growth across locations and countries. A good investment climate fosters productive private investment and economic growth by creating opportunities for the private sector to invest, create jobs, and lay the foundations for longterm business success (World Bank 2005c). The investment climate is defined as the institutional, policy, and regulatory environment in which firms operate.1 Key determinants of the investment climate include economic and political stability, rule of law, infrastructure, approaches to regulations and taxes, functioning of labor and fi nance markets, and broader features of governance, such as corruption (World Bank 2005c). This book uses data from the World Bank investment climate surveys, which provide the basis for the investment climate assessments, as well as the World Bank Doing Business reports in order to analyze and compare the investment climate
of Brazil, India, and South Africa (see appendix A for more information on the investment climate concept, means of assessment, and data sources).