Georgia’s old byzantine system of construction licenses and permits used to deter entrepreneurs from building legally. But as the construction sector was heating up in Tbilisi, Georgia’s government decided to lift bureaucratic hurdles by passing 2005’s Law on Licensing and Permits and Regulation 140 (on issuing construction permits) just a few weeks later. The re¬sult: the number of activities requiring a business license fell from 909 to 159. In addition to slashing the number of licenses required, Georgia’s reforms introduced a one-stop shop, “silence-is-content” rules, and statutory time limits to keep permits moving.
This case study tracks Georgia’s successful reforms in construction from 2004 to 2006 and tallies up their results.
- As a result of efficient construction reforms, the average time required to build a warehouse in Tbilisi dropped from 285 days to just 137 days.
- According to the USAID’s Georgia Business Climate Reform project, the number of construction permits issued in Tbilisi grew 151% after the reforms—from 867,000 in 2005 to 2,175,000 in the first nine months of 2006.
- While the government had already eliminated 85% of the 909 licenses and permits it used to require by 2006, the government planned to cut another 18% by the end of 2007—bringing the total down from 159 to 130.