Panel trashes World Bank Report
An independent review panel has trashed the World Bank’s Doing Business Report and has recommended for changes to the highly cited benchmark on business regulatory framework.
The panel instituted in October 2012, by the President of the World Bank to review a broad range of issues surrounding the Doing Business Report, cites shortfalls, in a report released last week.
The panel which was chaired by Trevor Manuel who is the head of National Planning Commision in South Africa, has noted that the Doing Business Report has the potential to be misinterpreted and that it relies on a narrow information source.
“[The Doing Business Report] should not be viewed as providing a one-size-fits-all template for development. Empirical evidence on the results of business-regulation reforms captured by the report is mixed and suggestive at best. The report relies on a narrow information source. The abiding question is whether the experts – primarily lawyers – are the best source for the requisite primary data.
“Correlations between the report’s topics and developmental outcomes often do point to a negative association between the regulatory burden and economic development and growth. However, such correlations do not justify a causal interpretation,” reads the panel report in part.
The Trevor Manuel Report contends against the aggregation of indicators to produce the “Ease of Doing Business” rankings table. The report argues that rankings are challenging because they involve aggregating across indicators – a process that explicitly or implicitly involves a value judgment.
Commenting on the report, Ministry of Industry and Trade spokesperson Wiskes Nkombezi in a telephone interview on Monday, said regardless of the shortfalls the report is still useful.
“The Doing Business reports help us know where we are lacking to improve on them. We are aware that there are shortfalls in methodology but what is important is the diagnosis that the surveys give,” said Nkombezi.
The panel, however, recommends that the Doing Business report be retained as an annual flagship report, but without the aggregate rankings.
The Doing Business Report analyses regulations that apply to economies business’ lifecycle. It assesses regulations affecting domestic firms in 185 economies and ranks the economies in 10 areas of business regulations—starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
In the 2013 report, Malawi slipped six steps from 151 to 157 out of 185 economies.
Malawi ranked 141 on starting business, 175 on dealing with construction permits, 179 on getting electricity, 97 on registering property, 129 on getting credit, 82 on protecting investors, 58 on paying taxes, 168 on trading across borders, 144 on enforcing contracts, 134 on resolving insolvency.
However, Malawi also slipped three steps on the World Economic Forum 2013 Travel and Tourism Competitiveness Index, from 121 to 124 out of 140 countries.
Malawi also slumped by an overwhelming 13 steps on Information and Communications Technology 2013 uptake moving from rank 116 last year to 129 out of 144 economies.
