The World Bank Thursday said it would discontinue the practice of issuing Doing Business report following an investigation prompted by internal reports of “data irregularities” in its 2018 and 2020 editions (released in 2017 and 2019, respectively) and possible “ethical matters” involving bank staff.
According to an investigation conducted by Washington-based law firm WilmerHale, World Bank staff members changed data on China to improve its ranking on the ease of doing business, under pressure from the office of the then-World Bank president Jim Yong Kim and the then-chief executive Kristalina Georgieva and one of her advisers.
Georgieva is the current MD of the International Monetary Fund.
The reports were flagged by the World Bank for certain “improper data changes” made in case of four countries — China, Azerbaijan, Saudi Arabia and the UAE — at the behest of senior executives at the bank.
“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,” the World Bank said in a statement.
Notably, in three reports, released in 2017, 2018 and 2019, India ranked among the top 10 economies showing “the most notable improvement”. The latest report, published in October 2019, placed India at 63rd in Doing Business, compared with 77th in 2018 and 100 in 2017.
Of the 79 positions in the Bank’s Doing Business rankings that India gained between 2014 and 2019, 67 rank improvements happened 2017 onwards, with the biggest 30-rank jump happening in the Doing Business 2018 report, released in October 2017.
The report published in 2019, which mentioned India and China being among the top 10 improvers, stated that the leaders of these countries adopted the Doing Business indicators as a core component of their reform strategies. The scores for India used to be based on coverage of just two cities, with Mumbai carrying a weight of 47 per cent and Delhi a weight of 53 per cent.
An e-mail query sent to the World Bank on the specifics on the data irregularities did not elicit a response at the time of going to press.
According to the report released in October 2019, India, along with other top improvers, had implemented 59 regulatory reforms in 2018-19, accounting for a fifth of all reforms recorded worldwide. During 2018-19, India had implemented reforms across parameters such as ‘starting a business’, ‘dealing with construction permits’, ‘trading across borders’, and ‘resolving insolvency’. The government’s goal was to be among the top 50 economies by 2020. In a statement, the World Bank had said at the time of release that “special focus given by the top leadership of the country, and the persistent efforts made to drive the business reforms agenda, not only at the central level but also at the state level, helped India make significant improvements”.
China, for which irregularities were noted for the report released on October 31, 2017, held the 78th rank despite a member of the Doing Business leadership approving and authorising submission of the final report on October 16 that year in which China ranked 85th. The change in China’s ranking happened after intervention from the bank’s top executives and their staffers, as per the investigation report.
In the case of Saudi Arabia, in the report released in October 2019, initially the country was placed second in the list of top improvers for that year, followed by Jordan. However, the Doing Business team was instructed “to find a way to alter the data such that Jordan fell from its first-place position in the top improvers list”, the investigation said. The parameter that was altered to push Saudi Arabia’s score also impacted the UAE’s score because they followed a similar system.
For Azerbaijan, involvement from World Bank staffers is believed to have resulted in the country’s score falling compared to previous years.
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