Ceasing Publication of the Doing Business Report

Letter to the World Bank Executive Directors

March 11, 2021

We write as concerned members of the civil society organisations, academia and trade unions to call upon the World Bank’s board of executive directors to end the publication of the World Bank’s Doing Business Report. As you are aware, the Doing Business Report has been the focus of longstanding and well- substantiated criticisms, including from academics, legal experts, civil society organisations and trade unions. Even high-level former UN and OECD officials have questioned the report. These criticisms have been raised on several grounds, including methodology, data selection and scope, questionable robustness of the aggregate rankings, and its anti-regulation bias.

The 2013 Independent Panel Review commissioned by the World Bank issued valuable recommendations, but the institutional response was limited. The panel recommended that the use of rankings be discontinued. It also recommended the permanent deletion of the labor market flexibility and tax rate indicators, as the latter penalizes countries that require businesses to pay corporate taxes or make contributions to social security, pensions and other social protection schemes that support households.

In 2018 Paul Romer, then the World Bank’s chief economist, said that “political motivation” of Bank staff may have contributed to a decline in Chile’s ranking under the social democratic President Michelle Bachelet. An audit commissioned by the Bank in 2018 found no evidence of interference, but detailed that “frequent methodology changes reduce the value of the indicators to researchers, policy makers and the media”.

The result is a high-stakes competition among countries, despite the foundational problems of the index and the limited meaning of year-over-year ranking comparisons. The outsized influence of the report undermines the broader policy engagement of the Bank by pushing governments toward unbalanced and short-term policymaking that is not actually beneficial for business, jobs, or sustainable development. The high-stakes nature of index positions may have also created the incentives for interference. As the world struggles to respond to and recover from the health and economic crises triggered by the Covid-19 pandemic, the consequences of the deregulatory race-to-the-bottom incentivised by the Doing Business Report and its world rankings have become painfully evident.

For too long, the Doing Business Report has encouraged policies that have worsened inequalities — including deregulations which exacerbated the global gender and racial division of labour, eroded labor protections and domestic resource mobilisation capacity, suppressed domestic aggregate demand and economic diversification and thus strained the legitimacy of state institutions.

As UNCTAD’s latest Trade and Development Report stresses, a just recovery will require that the world addresses a key weak aspect of the development paradigm: “Mainstream economic analysis has contributed to the lack of preparedness of policymakers by promoting the wrong notion of resilience — one focused on doing business and foreign investors, rather than good jobs and income security — with an attendant narrowing of the aims and objectives of economic policy.”

Efforts to investigate data irregularities are welcomed in the interest of transparency. However, the problem goes much deeper and cannot be resolved by tinkering at the edges. The underlying premises of the Doing Business Report are not supported by evidence and contradict the objectives of a just recovery. This is why its publication should cease.

Sincerely,

The undersigned 346 civil society organisations, social movements, trade unions, academics and independent experts from 75 countries