The World Bank Group announced Thursday that it was discontinuing the ‘Doing Business report’ after data regularities were discovered in its Doing Business 2018 and 2020.
The Doing Business report provides objective measures of business regulations for local firms in 190 economies. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages countries to compete towards more efficient regulation; offers measurable benchmarks for reform
In an investigation of Data Irregularities in Doing Business 2018 and Doing Business 2020 report, law firm WilmerHale discovered irregularities in data for China, Saudi Arabia and UAE, and Azerbaijan’s placement in the Doing Business reports.
In a statement on its website, the World Bank said, “Trust in the research of the World Bank Group is vital. World Bank Group research informs the actions of policymakers, helps countries make better-informed decisions, and allows stakeholders to measure economic and social improvements more accurately.
“Such research has also been a valuable tool for the private sector, civil society, academia, journalists, and others, broadening understanding of global issues. “After data irregularities on Doing Business 2018 and 2020 were reported internally in June 2020, World Bank management paused the next Doing Business report and initiated a series of reviews and audits of the report and its methodology.
“In addition, because the internal reports raised ethical matters, including the conduct of former board officials as well as current and/or former bank staff, management reported the allegations to the bank’s appropriate internal accountability mechanisms.
“After reviewing all the information available to date on Doing Business, including the findings of past reviews, audits, and the report the bank released today on behalf of the Board of Executive Directors, World Bank Group management has taken the decision to discontinue the Doing Business report.
“The World Bank Group remains firmly committed to advancing the role of the private sector in development and providing support to governments to design the regulatory environment that supports this.
“Going forward, we will be working on a new approach to assessing the business and investment climate.”
The investigation findings and reports by WilmerHale submitted to the World Bank executive directors said, “The changes to China’s data in Doing Business 2018 appear to be the product of two distinct types of pressure applied by the Bank leadership on the Doing Business team: (1) pressure – both direct and indirect – applied by senior staff in the Office of the President, presumably at the direction of President Kim, to change the report’s methodology in an effort to boost China’s score; and (2) pressure applied by CEO Georgieva and her advisor, Mr Djankov, to make specific changes to China’s data points in an effort to increase its ranking at precisely the same time the country was expected to play a key role in the bank’s capital increase campaign.”
The report said that the changes to Saudi Arabia’s and UAE’s data in ‘Doing Business 2020’ was likely as the result of efforts by a senior member of the World Bank’s staff to achieve a desired outcome and reward Saudi Arabia for the important role it played in the bank’s community, including an ongoing RAS project.
As regards Azerbaijan, the report said, “The chain of cause-and-effect is more direct with respect to the data changes affecting Azerbaijan in Doing Business 2020: Mr Djankov ordered the Doing Business team to alter the country’s data based on his own belief that the country had not actually implemented the reforms the Doing Business team had credited.
“Indeed, multiple employees told us that Mr Djankov appeared to harbor a personal animus against the country, unwilling to believe that the reforms the Doing Business team recognised – and confirmed – were legitimate.
“Despite the team’s effort to convince him otherwise, Mr Djankov overruled the team and demanded that it refrain from recognising three Azeri reforms in Doing Business 2020.”
International Monetary Fund Managing Director Kristalina Georgieva who was the World Bank’s Chief Executive Officer at the time has been called out by the bank for applying pressure to boost China’s position in a ranking of economies, according to Bloomberg.
In a statement responding to the allegations, Georgieva “I disagree fundamentally with the findings and interpretations of the Investigation of Data Irregularities as it relates to my role in the World Bank’s Doing Business report of 2018.”
She added that she had already had an initial briefing with the IMF’s executive board on the matter.