For the second year in a row, Singapore tops the World Bank's list for the best place in the world to do business. But other countries made great strides with Egypt ranking as the top global business reformer over the past year. The report says Croatia has done the most among East European countries to simplify its business environment.

Melissa Johns

Melissa Johns, a co-author of the World Bank's fifth annual Doing Business report says easing business regulations has multiple payoffs.  "Overall, we found that the countries reforming the most see greater returns on stock investments and also have lower unemployment."

"Also, the investors are going into countries that are reforming the most," she continued. "No matter where they start off in rankings, they are acting to improve the business climate and are seeing the results of that."

The annual report studied performance in 10 areas. Reformers have generally eased requirements for starting a business; strengthened property rights, increased access to credit, and relaxed tax burdens.

Johns points out more people go into business when governments ease regulations for doing business. "Countries that are reforming have more business starting up. So now, Georgia has the same number of business per 100 people as Malaysia," she says. "We see the trend repeated in other eastern European countries, such as Slovakia and Serbia [which] have also seen a new boom in business start-ups."

Doing Business 2008 measured 178 economies on the ease of doing business. The U.S. ranks third behind Singapore and New Zealand.

Large emerging economies, such as India and China, are reforming at a fast pace.  The report notes business reforms are also on the rise in the Middle East and North Africa. However the pace of business reform was slower in Latin America than any other region.