In 2008-2009, more governments implemented regulatory reforms aimed at making it easier to do business than in any year since 2004, according to the report, entitled 'Doing Business 2010: Reforming through difficult times'.
"We see a lot of momentum behind the reforms, and each year we do this we see a lot more reforms than in previous years," said Gregory, who supervised the study, published on 10 September.
"We expect to see these reforms having an impact, with more jobs being created, more firms being created and the cost of doing business going down," Gregory said, adding that his outlook for Europe in 2010 was "positive".
The 'Doing Business' report, now in its seventh year, focuses on small businesses and regulations that affect ten key stages of their lives: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.
EU hopefuls among the top reformers
According to Gregory, those countries which recently joined the EU rank among the top reformers when it comes to making life easier for small businesses. "We see a lot of activity in the EU accession countries, of course. In previous years, they accounted for around 60% of the reforms in the region," he said.
But this year, the emphasis seems to be shifting to new EU hopefuls. "This year we've started to see the reform effort move further east beyond the accession countries. We think the reason for this is that countries are looking at what their neighbours are doing and learning from the experience of others."
Macedonia, for example, now features among the fastest reformers, according to the World Bank study, together with Belarus and Kyrgyzstan.
"Those countries have been doing reforms for several years and I think we are seeing that pay off," said Gregory, citing reforms in Macedonia that have made it easier to start a business or obtain a construction permit.
"We can see that most of these are really quite low-cost activities for governments to do, so it shows how some quite simple changes, when you add them together in all these different areas, can really make a big difference."
Crisis not slowing down reforms
The World Bank vice-president said he was positively surprised to see that reforms had not been hampered by the financial crisis, which brought Central and East European countries such as Hungary to the brink of bankruptcy last year before they were eventually bailed out by international institutions.
"We were concerned that the crisis might lead to a slowdown in reforms," Gregory said, but in fact, the figures "showed an increase in the rate of reform in this region".
"The kind of reforms we are seeing – in getting access to credit, making it easier for business to go into insolvency and to open businesses – all of that is going to make it easier for new businesses to form and for jobs to be created by SMEs."
Even in highly-developed Western European countries, reforms have continued unabated despite the crisis, Gregory remarks. "For example the UK has reformed this year, particularly in construction permits. It has improved its performance, even though it was already at number six, and now it is at number five."
Changes there were of course less spectacular than in Eastern Europe, which started from a lower overall rating.
Picture not all rosy
Although bad examples in Europe were few, the report also points to reforms that have made life more difficult for small enterprises.
Luxembourg, for instance, has made redundancy regulations "less flexible and more costly," Gregory said, "because they combined the rules that were previously in place for blue collar and white collar workers".
And in Romania, the government introduced "a new fee which has to be paid on new construction when you get a construction permit, which is something we see as being an additional obstacle to small businesses".
Gregory believes benchmarking exercises like the World Bank's annual 'Doing Business' report "bring the policymaker's attention to these kinds of inadvertent impacts, which may not have been realised when they made the changes".
"We highlight them in this report and obviously hope to see changes made which will minimise the negative impact of changes in future years."
To read the full transcript of this interview, please click here.
