Doing Business in Ancient Rome: A curious case

Singapore remains the best place to do business according to World Bank's "Doing Business Report"

Overall, prosperous countries rank high on the list and poor countries rank low. For example, in the doing business 2010 report Singapore ranked first and the Central African Republic ranked last. What score would Doing Business give to Ancient Rome? Here is an analysis of the Roman business system based on Doing Business’s ten criteria.

The twelve tables were the Ancient legislation that stood at the foundation of Roman Law.

Lets start with the first one. Starting a business seemed easy enough and there were no restrictions for women, non-Romans and slaves. Still, it was far easier for Roman men to open a business than anyone else. As for the second point, business could be done without any license at all, except for government monopolies like salt, metals and marble. The third element, employing workers, was much too easy for a healthy business sector, in fact there were no restrictions against businesses hiring and firing ordinary wage workers or against workers taking jobs and quitting them. The fourth element, registering property was also an easy procedure. Thanks to Rome’s advanced legal system, written laws allowed and protected individuals to own and sell property of all kinds.

Table III regulates debt. Among others it states that 'in case of an admitted debt or of awards made by a court, 30 days shall be allowed for payment'

Even though the Roman legal system allowed and protected loans with interest as a form of contract, the volume of loans stayed small. In fact, the old Roman ruling class was made up of feudal lords and government officials who looked down on business as a lowly occupation. With no big banks to borrow from, the government paid for a larger army by raising taxes. In centuries of war the larger and larger army called for more and more taxes which crippled the business sector. So, as for the fifth criterion, getting credit, ancient Rome doesnt get a passing mark. The same can be said of the sixth element, protecting investors. Indeed there were no real corporations, where individuals pooled money for a single ongoing enterprise. The category did not even exist in Roman law.

Current President of the Democratic Republic of Congo

The seventh element, paying taxes, was no special burden for business except during wars. A business owner paid one annual tax of 1 to 3 percent on property and wealth. By contrast, in the Congo Republic, ranked 182th, Doing Business reports that companies pay taxes that take 65.4% of its profits. The eighth element, trading across borders, benefited from the Empire`s great size. From Britain to Syria there were no borders, so no customs duties to pay.

Luxembourg is the country with the highest Enforce Contract score according to World Bank's "Doing Business Report"

The ninth element, enforcing contracts, was the pride of the Roman legal system. Courts throughout the Empire made contracts easy to create and easy to enforce.

According to World Bank's "Doing Business" report, Japan is the country where it takes less to close a business

The tenth element, closing a business, is mostly about bankruptcy: how much does it cost, in time and money, to end your business, and can your creditors get some of their money back? Roman law treated bankruptcy as unpaid debts under contract law. The court let you seize the property of others or force them to be your slave if they failed to pay.

This map illustrates the size of the Roman Empire

As it can be seen there were many strengths in the Roman business system and they were mainly a result of the developed Roman legal system and of the Empire`s great size. On the other hand, slavery, the absence of corporations and the seizure of property were the biggest drawbacks.