EXPLANATOR: Why the World Bank is under fire from multiple rankings | national news
By PAUL WISEMAN AP Economics Writer
WASHINGTON (AP) – Under fire over claims it bowed to pressure from China and other governments, the World Bank has dropped a popular report that ranked countries based on how welcoming they are to business.
The report is important to many companies and investors around the world: they use the World Bank’s “Doing Business” report to decide where to invest money, open manufacturing plants, or sell products.
Eager to attract investment, countries around the world, especially developing economies, have sought to improve their ranking in the World Bank report.
Sometimes countries sought to make significant policy changes, such as making it easier for companies to pay taxes, get loans, or enforce contracts. Sometimes they adopted a more aggressive tactic: like arrogant high school students coaxing a teacher for a better grade, they pressured the World Bank to give the “Doing Business” report a higher score.
Countries that have achieved high rankings have often touted their success. In 2017, for example, Prime Minister Narendra Modi took to Twitter to celebrate India’s great improvement in 2017. In Rwanda, the country’s development council employs a “Doing Business Economist”.
But the World Bank has long been accused of using sloppy methodology and succumbing to political pressure by producing the “Doing Business” ranking. This week, the bank dropped the report after investigators examined internal complaints about “data irregularities” in the 2018 and 2020 editions of “Doing Business” and possible “ethical issues” involving staff members. from the World Bank.