External review finds deeper rot in World Bank Doing Business rankings

A participant stands near a World Bank logo at the International Monetary Fund – World Bank 2018 Annual Meeting in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS / Johannes P. Christo / File Photo

WASHINGTON, Sept.20 (Reuters) – Weeks before the World Bank scrapped its flagship Doing Business ranking following a damning independent investigation, a group of external advisers recommended an overhaul to limit countries’ efforts to “manipulate their scores”.

An 84-page review, written by top academics and economists, was posted on the bank’s website on Monday, about three weeks after it was submitted to the World Bank’s chief economist, Carmen Reinhart.

The World Bank on Thursday announced it would cancel the “Doing Business” series on the business climate in countries, citing internal audits and a separate independent investigation by law firm WilmerHale which found senior World Bank executives , including Kristalina Georgieva, who now heads the International Monetary Fund. , pressured staff to change the data in favor of China during his tenure as CEO of the World Bank. Read more

Georgieva strongly denied the findings. Read more

World Bank President David Malpass, in his first public comments since the data-rigging controversy erupted last Thursday, told CNBC the WilmerHale report “speaks for itself” and the bank will explore new approaches to help countries improve their business climate.

The review released on Monday was drafted by a group convened by the World Bank in December 2020, after a series of internal audits uncovered irregularities in reporting data on China, Saudi Arabia, the Arab Emirates United and Azerbaijan.

He calls for a series of corrective measures and reforms to address the “methodological integrity” of the Doing Business report, citing what he called “a model of government efforts to interfere” with scoring over reports. in recent years.

“The World Bank needs soul-searching. It has advocated national reforms for better governance, transparency and practice. It must now use the prescription for its own reform,” said Mauricio Cardenas, professor at Columbia University. and former Colombian Minister of Finance. chaired the expert group.

Experts blamed the Doing Business series for the lack of transparency on the underlying data and questionnaires used to calculate rankings, called for a firewall between the Doing Business team and other World Bank operations, and the creation of a permanent external review committee.

“We have been made aware of several instances where national governments have attempted to manipulate DB scores by putting pressure on individual contributors,” the report said, naming lawyers, accountants or other professionals.

“World Bank staff have mentioned several countries where they believe government officials have told contributors how to respond. And even in the absence of explicit government pressure, of course, the perceived threat of retaliation can influence the report of contributors.


The authors also called on the bank to stop selling advisory services to governments aimed at improving a country’s score, noting that they constitute an apparent conflict of interest.

“The World Bank should not simultaneously engage in assessing countries’ business environment while accepting payments to guide countries on how to improve their scores,” the authors wrote. The World Bank has offered these “reimbursable advisory services” or RAS in a number of countries, including some of those involved in the data manipulation investigation, such as China and Saudi Arabia, according to the review.

In December 2020, according to the review, an internal audit reported that bank management pressured nine of 15 employees to manipulate data from the 2018 and 2020 numbers of the Doing Business Index, propelling the Saudi Arabia as “most reformed” in the world and supporting the ranking of the UAE and China, while dropping Azerbaijan from the top 10, external advisers reported.

WilmerHale’s separate report said the changes to Saudi Arabia’s data were “likely the result of an effort by a bank staff member to achieve the desired outcome and reward Saudi Arabia for the important role it plays. ‘She has performed in the Bank’s community, including its significant and ongoing RAS. projects. “

Justin Sandefur, a senior researcher at the Center for Global Development in Washington and another member of the expert panel that produced Monday’s report, said he was showing “a governance problem” at the World Bank and that he didn’t had seen no assurance that similar problems would occur. not continue with other datasets.

Reporting by Andrea Shalal; additional reports by David Lawder; Editing by Heather Timmons and Grant McCool

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