WASHINGTON — An independent panel recommended on Monday that the World Bank scrap a contentious and influential ranking of countries meant to evaluate the ease of doing business.
The annual "Doing Business" report, first published by the World Bank in 2003, ranks 185 countries by aggregating 10 different indicators such as starting a business, getting construction permits, electricity, and credit, registering property, protecting investors, paying taxes, and enforcing contracts. It is supposed to assess how easy or difficult the regulatory and legislative environment makes it to do business.
The review panel, set up by the World Bank and headed by South African planning minister Trevor Manuel, concluded the main index was open to misinterpretation and should be discontinued. It urged the World Bank to continue publishing the report without the headline index and instead give only separate rankings for each individual indicator now aggregated into the main index.
"The Doing Business report has the potential to be misinterpreted," the panel's report said. "The panel found that the main disagreement was whether the Doing Business report measured the correct indicators, in the correct way. In other words, the debate was about whether a higher ranking implied that a country was on the right track for private-sector development."
The World Bank set up the independent review after the index came in for some harsh criticism from a number of directions. China and India, which ranked 91 and 132 respectively in the latest index, were among the critics.
The panel said the key criticism was that the structure and publication of the report focused attention primarily on the indicator rankings to the exclusion of the report's remaining content. It said another big concern was whether the information being gathered was really relevant.
The rankings have garnered considerable attention and World Bank President Jim Yong Kim said they have motivated reforms in some countries. Kim and the U.S., the Washington-based World Bank's largest shareholder, support the index and Kim will decide whether to accept the panel's recommendations.
The 2013 Doing Business index ranked Singapore first followed by Hong Kong, New Zealand and the U.S. The Central African Republic came in last.