The World Bank’s Misleading Defense of the Doing Business Index
February 14, 2018
Source: Center for Global Development
Reasonable people can disagree about the usefulness of the World Bank’s country rankings. But after the Chief Economist resigned amidst a controversy about the index, the Bank has made a number of misleading claims, including defending numbers in the press that its researchers have quietly repudiated.
In the past few weeks, my colleague Divyanshi Wadhwa and I published two pieces examining the controversy over the World Bank’s Doing Business index, which measures the regulatory burden facing businesses around the world. Our first piece examined the case of Chile, investigating the World Bank Chief Economist’s own revelation that methodological changes to the index had caused Chile’s rank to fall during Michelle Bachelet’s Socialist government, rise under her conservative successor, and fall again when she came back to power. Leaving conspiracy theories aside, our analysis—for which we released data and code—confirmed that this pattern of fluctuations was far greater than what we could reproduce using a consistent methodology over time.
Our second piece questioned the results for India, whose sudden rise in the World Bank rankings has been celebrated by Narendra Modi’s government. Once again, holding methodology as constant as possible, the sudden surge under Modi’s government became a modest rise.