This paper seeks to evaluate the current progress on creating a favourable climate for investment in Asia. The first section is a conceptualisation: it offers a definition of the investment climate and discusses individual components, looks at the empirical links between growth and the investment climate and raises the question of whether investment climate policy should be centralised or decentralised. The second section looks at how challenges to doing business vary across types of firms (from small family farms and other small enterprises to large domestic and multinational firms). The third section analyses the micro data on the investment climate in Asia. The final section takes a pragmatic approach to the investment climate by analysing the constraints and political economy costs of implementing investment climate as well as outlining potential partnerships which can be built both within the Asian region and among Asian governments and international agencies to facilitate evaluation and reform of the investment climate.