There is a growing interest in reforming the business environment as a means to stimulating economic growth. Unlike other interventions, business environment reforms have the advantage of potentially benefiting the entire business sector, rather than individual enterprises; however, it is less easy to attribute new growth to particular reforms. To counter this, a number of tools are being developed to measure and compare the business environment in different countries. It is also apparent that strong domestic institutions are needed to carry out effective ongoing reform programmes, and that new skills are needed among the donor community if it is to provide sound advice and add value to domestically driven reform programmes. These and other challenges are outlined in this article and are being discussed at a conference of the Donor Committee for Small Enterprise Development in Cairo in November.
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