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Burden of customs procedure, WEF (1=extremely inefficient to 7=extremely efficient) - Middle East

Definition: Burden of Customs Procedure measures business executives' perceptions of their country's efficiency of customs procedures. The rating ranges from 1 to 7, with a higher score indicating greater efficiency. Data are from the World Economic Forum's Executive Opinion Survey, conducted for 30 years in collaboration with 150 partner institutes. The 2009 round included more than 13,000 respondents from 133 countries. Sampling follows a dual stratification based on company size and the sector of activity. Data are collected online or through in-person interviews. Responses are aggregated using sector-weighted averaging. The data for the latest year are combined with the data for the previous year to create a two-year moving average. Respondents evaluated the efficiency of customs procedures in their country. The lowest score (1) rates the customs procedure as extremely inefficient, and the highest score (7) as extremely efficient.

Source: World Economic Forum, Global Competiveness Report and data files.

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Development Relevance: The World Economic Forum's annual Global Competitiveness Reports have studied and benchmarked the many factors underpinning national compeititiveness. The goal has been to provide insight and stimulate the discussion among all stakeholders on the best strategies and policies to help countries overcome the obstacles to improving competitiveness. It serves as a critical reminder of the importance of structural economic fundamentals for sustained growth. Burden of customs procedure falls under WEF's sixth pillar: Goods market efficiency. Countries with efficient goods markets are well positioned to produce the right mix of products and services given their particular supply-and-demand conditions, as well as to ensure that these goods can be most effectively traded in the economy. Healthy market competition, both domestic and foreign, is important in driving market efficiency and thus business productivity by ensuring that the most efficient firms, producing goods demanded by the market, are those that thrive. The best possible environment for the exchange of goods requires a minimum of impediments to business activity through government intervention. Protectionist measures are counterproductive as they reduce aggregate economic activity. Market efficiency also depends on demand conditions such as customer orientation and buyer sophistication. For cultural or historical reasons, customers may be more demanding in some countries than in others. This can create an important competitive advantage, as it forces companies to be more innovative and customer-oriented and thus imposes the discipline necessary for efficiency to be achieved in the market.

Limitations and Exceptions: Although data were collected for almost 150 economies in 2012, after the editing process only data for 140 economies were used. Company size is defined as the number of employees of the firm in the country of the Survey respondent. Adjustments were made to the data based on searches in company directories and data gathered through the administration of the Survey in past years. In order to reach the required number of surveys in each country (80 for most economies and 300 for the BRIC countries and the United States), a Partner Institute will use the response rate from previous years. In cases where the information about the company's sector of activity is missing, the average response values across the surveys are apportioned to the other sectors according to the sample sizes in those other sectors. This has the effect of including these surveys on a one-for-one basis as they occur in the sample with no adjustment for sector. If the weight of an individual response exceeds 10 percent of the country sample, the sector-weighted average is abandoned for the benefit of a simple average.

Statistical Concept and Methodology: Data on the burden of customs procedures are from the World Economic Forum's (WEF) Executive Opinion Survey. The latest round included over 14,000 respondents from 144 economies. Data are collected online, through in-person interviews with business executives, and through mail and telephone interviews, with an online survey as an alternative. Sampling follows a dual stratification based on company size and the sector of activity. Responses are aggregated using sector-weighted averaging. The data for the latest year are combined with the data for the previous year to create a two-year moving average. Respondents evaluated the efficiency of customs procedures (related to the entry and exit of merchandise) in their country. The lowest value (1) rates the customs procedure as extremely inefficient, and the highest score (7) as extremely efficient. The yearly administration of the Survey is carried out with a strong network of over 160 Partner Institutes worldwide. The Partner Institutes are typically recognized research institutes, universities, business organizations, and in some cases survey consultancies. The Partner Institutes are tasked to follow detailed sampling guidelines in view of capturing a strong and representative sample. The Partner Institutes must: prepare a "sample frame," or large list of potential respondents, which includes firms representing the main sectors of the economy (agriculture, manufacturing industry, non-manufacturing industry, and services); separate the frame into two lists: one that includes only large firms, and a second list that includes all other firms; and based on these lists, choose a random selection of these firms to receive the Survey. Surveys with less than 50% completion rate are excluded. In addition, WEF uses Mahalanobis distance technique and a univariate outlier test to remove outliers. To weight the data by sector, individual answers are aggregated at country level and weighted by the estimated contributions of each of the four main economic sectors (agriculture, manufacturing industry, non-manufacturing industry, and services) to a country's gross domestic product. The weights of the other sectors are then adjusted proportionally to their weight in the country's GDP. As a final step, the sector-weighted country averages for 2012 are combined with the 2011 averages to produce the country scores that are used for the computation of the GCI 2012-2013 and for other projects. This moving average technique consists of taking a weighted average of the most recent year's Survey results together with a discounted average of the previous year.

Aggregation method: Unweighted average

Periodicity: Annual