Public Management

Doing Business: Trouble in paradise?

Thursday, 18 January 2018 09:31

Decried for long by its detractors, China particularly, the reliability of World Bank’s Doing Business (DB) rankings has been compromised. This time, the accusation comes from the Chief Economist of the institution himself.

Last Friday, in an interview with Wall Street Journal, Paul Romer (photo) said that the many recent changes to report’s methodology were motivated by political reasons. The executive goes further mentioning Chile which was, according to him, treated unfairly by the report’s authors.

Indeed, Chile which has a good macroeconomic environment has tumbled more than 20 places in the rankings since the arrival of socialist Michelle Bachelet at the country’s head. The South American nation which had been going up DB’s ladder since 2010 fell from the 34th position in 2014 to 57th with no evident explanation, except failing to meet delays imposed for tax payment for companies.

According to Romer, the report’s authors tarnished the country’s image on purpose. “I want to make a personal apology to Chile, and to any other country where we conveyed the wrong impression,” he told Wall Street Journal.

Going further even, the economist questioned the reliability of the Doing Business’ last four editions, which, he believes, favored some countries, such as India. A claim that puts in a bad spot his Indian predecessor, Kaushik Basu, who implemented most of the amendments pointed at by Romer.

Denying the accusations, the World Bank said, concerning the report, that “its methodology was not designed with any single country in mind”. The Washington-based institution however promised to conduct an external review on Chile’s indicators.

Regardless of the latter’s outcome, one thing is sure, the recent claims will support non-fans of the Doing Business which is a real scarecrow for all leaders worldwide. In fact, China is asking for its suppression.

The Doing Business report ranks each year nearly 200 countries based on their business climate.

Fiacre E. Kakpo

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