On 16 September 2021 the World Bank Group announced it had decided to discontinue the Doing Business report. This popular report started in 2002, with the first Doing Business report being published in 2004. It has been a key report used in policy discussions and the most-cited publication of the bank. This announcement is a sad development for multilateralism.
Initially the report was based on 5 indicators: starting an enterprise, contract enforcement, insolvency, contracting workers, and accessing credit. The report had a focus on private costs to the individual firm and has evolved to be a broader measure of private and social costs. The list of indicators has grown to 12: starting a business, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency, contracting with government. Its methodology produces values that offer international comparability with a focus on small - and medium - enterprises. This allowed the bank to produce the prominent Ease of Doing Business rankings.
This report offers a comprehensive tool to assess countries across the world on various issues. Assisting governments to appreciate their ranking with respect to a specific indicator and overall. It was the basis upon which many nations identified areas to reform and receive assistance from the World Bank Group or consultants. The data gathered through the report has empowered the bank and researchers to investigate economic and social improvements at a country-level. It also offered a subjective rating on how a country’s business environment compares to others. However, it has been noted that there are limitations to the report. In 2013 and 2021 Independent Panel Review’s noted that no causal claims to the Doing Business reforms lead to positive development outcomes. Mostly references to correlations between indicators and growth outcomes. Also, the problematic position that a tax rate of zero would be associated with best business environment. These are just a few of the concerns that have been raised over the period the report was being published.
Following a whistleblower’s report that alleged manipulation of data, an investigation was started in 2020. It found irregularities in the years 2018 and 2020. In 2018, the banks management applied direct and indirect pressure to the Doing Business team to find ways to present a country in a better ranking than the prior year. In 2020, the report was published including improper changes that affected the ranking of 3 countries. The investigation findings reveal a collapse in governance in top management; a toxic culture within the Doing Business team; and conflict of interest arising from the reimbursable advisory services offered to countries trying to improve their ranking on the report.
After 17 years the report has come to an end. Nations across the world have found themselves stranded given this development. Many of them had deployed resources towards improving their business environment and will now have to make sense of their objectives with or without the involvement of the World Bank Group. Given the interest of nations to increase firm-entry in various sectors, a critical tool to signal to investors is no longer available.
As questionable as the report may have been, it offered positive or negative exposure to nations that reformed or digressed. Disappointed to see an informative report fell victim to the poor decisions of individuals. It shows how important it is to be familiar and critique methodologies and guidelines adopted by multilateral institutions. As the sunsets for a group of individuals at the bank it is also sunrise for a new crop individuals and ideas. An opportunity to win the trust of nations has arisen and soon there will be an alternative report recommended to fill the void. Be on standby.