Neoliberalism for All: The World Bank’s Doing Business 2017

Alice Martin-Prével, Frederic Mousseau

“Equal Opportunity for All” subtitles the annual Doing Business report released last month by the World Bank. The choice is rather cynical for an instrument that has become a key driver of the neoliberal reforms promoted by the Bank around the world.

In the 1980s, the Structural Adjustment Programs (SAPs) conditioned the Bank’s loans to the liberalization of national economies and withdrawal of state intervention. Following the termination of the SAPs in 2002, the World Bank created the Doing Business to push the same doctrine. The project advocates for “cutting red tape;” opening the economy and minimizing “market distortions;” and focuses on identifying the “regulatory burdens” affecting private firms, without considering the social benefits of regulation.

Earlier this year, this core ideology of the Bretton Woods institutions (including both the World Bank and IMF) came under friendly fire in an article, “Neoliberalism: Oversold?,” authored by three IMF staff. While it did not spark a revolution, it was a recognition that neoliberal reforms promoted by these institutions harm the poor and fail to improve equity and livelihoods.

Doing Business: Gender Equity Doesn’t Make the Economic System More Equitable

This year’s Doing Business report introduces a gender dimension.  But gender equity doesn’t make the policies promoted by the Bank more equitable.  The report’s country scorecards show that the Bank gives better Doing Business scores to nations that favor corporate profits over citizens and countries’ interests. New Zealand, for instance, takes over Singapore’s long-held first place in the Doing Business ranking following the implementation of reforms reducing employers’ contribution to workers accident compensations.¹ Spain and Vietnam earn accolades from the Bank for abolishing environmental protection fees for corporations; and a total of 28 countries are rewarded for decreasing taxes affecting the private sector.

On the contrary, Tanzania’s score is docked for introducing a workers’ compensation tariff to be paid by the employers. Similarly, Malta is penalized for increasing the maximum social security contribution to be paid by the employers. Countries struggling with debt, financial, and social issues – including Greece, Equatorial Guinea, and Cameroon – are also reprimanded for increasing corporate taxes.

A Zero-Sum Game Where Workers, Farmers and the Poor Stand to Lose the Most

Like every year, the Doing Business release was accompanied by the celebration of those who gleaned a few spots in the ranking, while disappointed nations promised to do better in the future. But the Doing Business project is a zero-sum game where participants only win places in the ranking if others lose. So while the Bank celebrates that the “ease of doing business” has improved worldwide and registers a record number of reforms this year, its ranking, which bids nations against each other, fails to reflect global changes.

As governments bend over backwards to convince the Bank that their reforms should earn them better Doing Business rankings, let us not forget who stands to loose most from this treacherous game. Workers, farmers, and the world’s poor – the majority of whom are women – are the ones who pay for the Bank-imposed reforms, despite proclaimed concerns for gender equity and “equal opportunities for all.” The Doing Business project cannot be fixed. It must be abolished, as the World Bank’s quest to prioritize corporate profits, dictate neoliberal reforms, and trample over nations’ sovereignty.

Footnotes

• [1] New Zealand’s good Doing Business ranking hides a much less shiny reality. The country is a prime location for setting up money-laundering shell companies, as it has “a clean reputation, but doesn’t ask many questions when you’re setting up a company there.”