Breaking poverty's chains.

The article looks at the damage of regulations in developing countries. An often-ignored fact is that poor countries frequently hurt themselves by strangling business with red tape. A report from the World Bank, "Doing Business in 2005", provides a long list of such self-inflicted wounds in 145 countries. It examines seven indicators of a country's business climate, from the cost of starting a new firm and enforcing contracts to the ease of hiring or firing workers and of borrowing money. It finds that poor countries impose on average three times the administrative costs and twice the number of bureaucratic procedures as rich countries. Many of the problems in poor countries are the legacy of European colonists' laws and bureaucracy, designed to control a local population, not to encourage growth. Development aid is beset by arguments over whether improving the business climate or reducing poverty should be the priority.