Many countries also do a lousy job in enforcing contracts and property rights, notes the report.
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"It's not just enforcing contracts, although he does have a definite tendency in that direction, " said Ribstein.
The report cites high taxes and the difficulty of getting electricity and enforcing contracts as particularly steep hurdles.
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Both these features make writing and enforcing contracts which take every possible eventuality into consideration difficult, or even impossible.
This is because outside lenders fear that it will exploit its inside knowledge and the cost of enforcing contracts to repay less than it should.
More reforms could be taken from the World Bank publication Doing Business, which surveys 178 economies on everything from the ease of setting up legal businesses to enforcing contracts.
Georgia made strides in six of 10 categories, including the time it takes to start a business, dealing with licenses, employing workers, getting credit, cross-border trade and enforcing contracts.
Countries are judged in ten categories that span the life of an enterprise, from its launching, to coping with licenses, obtaining credit, paying taxes, enforcing contracts and dealing with bankruptcy or dissolution of the entity.
Namely, the survey quantifies the time and costs involved in starting a business, dealing with licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.
From that research, IFC scores countries on the time and costs involved with starting a business, dealing with licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.
The World Bank has an economic research section that each year turns out a first-rate book called Doing Business, which surveys 175 economies on everything from how many licenses you need to start a business to enforcing contracts to securities transparency.
In addition, lenders will have to ponder the legal difficulties of enforcing debt contracts in emerging markets.
The survey of each country covers the ease or difficulty of doing business by a number of measures, such as procedures needed to start a legal business, rules concerning the hiring and firing of workers, registering property and enforcing commercial contracts.
Not so, argues Eduardo Basualdo, an economist: the Menem government was lenient in enforcing the utilities' contracts, and Mr de la Rua could insist on a renegotiation.
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