World Bank Suspends “Ease of Doing Business report”

Since 2003, the World Bank has published the Ease of Doing Business report which ranks 190 economies based on their business climate. The ranking aggregates 10 different indicators such as starting a business, getting construction permits, electricity, 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. Higher ranking indicates favourable conditions for starting a firm.

Many countries undermine social progress to improve their ranking. Reduced employment protection, lower social security contributions, and reduction in corporate taxes are just a few of the many changes that promote economic and social inequality.

On 27th August, the World Bank announced the suspension of the Ease of Doing Business report because of data irregularities.

Wall Street Journal discovered some irregularities in the 2018 and 2020 reports. In response to this, the World Bank has called for an audit and review of the report. Former World Bank Chief Economist, Paul Romer has said that the data in the report was susceptible to manipulation. The Wall Street Journal report also indicated the data has been “inappropriately altered by countries like China, Azerbaijan, UAE, and Saudi Arabia".

The World Bank may uncover data manipulation by more countries resulting in a major blow to its reputation. However, the suspension of this report will result in a huge economic loss for countries which have improved in the last few years including India, Pakistan, Kuwait, Tajikistan, Jordan, Togo, and Bahrain.

Written by Hardik

Artwork by Zara Masood