why we need to save the Doing Business report – Jeune Afrique

Following an independent investigation by the law firm WilmerHale, which pointed to inappropriate pressure from China and other countries during the preparation of its annual Doing Business report, the World Bank decided to suspend this publication. It’s a bad decision. This report is truly a public good of enormous value as it reviews pro-free enterprise reforms around the world. Rather than removing it, it should rather have been separated from the management methods of the institution.

Read

Doing Business: Should Africa Regret World Bank Report?

Objective data

Since its launch in the early 2000s, this document has established an innovative and relevant approach to assessing the business climate in 190 countries. Unlike surveys on which many similar exercises are based, the Doing Business method relies almost entirely on objective data compiled by trusted intermediaries, most often reputable local law firms. The report, for example, does not ask users what they think of an electricity company, but how many days it takes on average to connect to the grid again.

The “land notes” do also subjected to pressure without having to throw them in the bin

The ranking also gives a comprehensive picture of whether it is easy to implement and covers twelve themes. It can certainly be accused, as is the case in France, of promoting neoliberal values. Nevertheless, the report provides very useful information. For example, the United States ranked first for its overall business-friendly environment, second in 2020 in insolvency management, seventeenth in contract enforcement, and only twenty-fifth in paying taxes. Russia ranks far behind, the report says – except for contract enforcement, where it ranks four places lower than the US.

Although its score must now be questioned, China stands out among the countries in which it is easier to do business, more so than almost all middle-income economies. And this, while its business climate remains much less favorable than in the United States and the major European countries.

Gray area

As with any exercise of this type, both complex and far-reaching – and very few reach the level of Doing Business – the methodology and sources for assessing this or that specific aspect are questionable. The choice of measures and weights assigned to different variables inevitably involves a margin of discretion on the part of the World Bank’s experts.

But many other reports are subject to more or less strong political pressure, like the IMF’s “country notes” or “T4” articles, without any question of throwing them in the trash. Should I remind him? All reports with a global scope are reviewed and subject to control by the management committees of the institutions that publish them, because there is always a gray area in the game of their preparation between the work of the research teams and the interests of the member. the countries of the institutions.

Read

[Chronique] Doing Business report: a tool, not a bible

Nevertheless, Doing Business has become a reference for economic and entrepreneurial analysis, a source of data for policy reflections, private sector presentations and academic speeches. More importantly, politicians are following the report, and by the dozens of countries have developed reforms to address the weaknesses identified!

The best way to deal with a conflict of interest is to tackle it head on

Many countries have streamlined the processes for establishing a new business, which benefits both SMEs and foreign investors. Heads of state and ministers regularly praise their countries’ progress in the report, and every year the ranking is covered by the international press. Doing Business is a significant benchmark within trade and development sectors. He particularly noted the sharp deterioration in the situation in South Africa, which fell from 41st to 84th place between 2014 and 2020.

Create an independent department

The willingness of world powers to use their influence and political capital to try to change their position in the ranking speaks volumes for its importance and why it must continue to exist. Furthermore, the WilmerHale firm did not recommend its elimination or criticize its methodology. He pointed to a conflict of interest: When powerful countries don’t like the report’s messages or disagree with their ranking, they can put pressure on the bank’s officials. And since these countries are among the largest shareholders in the institution and are major contributors to the World Bank’s initiatives, these can be difficult to overcome.

Read

“Doing business in Sudan”: a good deal?

WilmerHale made several recommendations aimed at protecting the Doing Business report from manipulation by making its procedures and methods transparent. The World Bank must continue the report and even go beyond these recommendations. The best way to deal with a conflict of interest is to tackle it head on with the means at our disposal.
The World Bank thus has an independent evaluation department whose role is to judge the failure or success of projects carried out directly with the board. Its leaders are chosen from among the most seasoned and experienced leaders who are nearing the end of their careers – and therefore unable to stand for another position thereafter. The Doing Business report team could be established on the same model as an independent department of the World Bank to provide an essential service to Community international.

Leave a Comment