Economy

World Bank Pauses Publication of its 'Doing Business' Report as it Probes "Data Irregularities"

The financial institution announced that it will be auditing its data collection and review processes. It will also retrospectively correct the data of countries that had been "affected".

New Delhi: In a surprising turn of events, the World Bank on Thursday evening announced that it was temporarily pausing the publication of its well-known ‘Doing Business’ report as it investigates a number of “data irregularities” that have been reported in the 2018 and 2020 reports.

“A number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019,” the financial institution said in a brief statement.

“The changes in the data were inconsistent with the Doing Business methodology.”

The ‘Doing Business’ report is a popular ranking system that measures the ease of conducting business in a particular country. In the last few years, it has been a closely watched indicator by the Narendra Modi government, which has specifically focused on ensuring that India performs better in the rankings.

In the 2018 ‘Doing Business’ report, in which the World Bank said “irregularities had been reported”, India moved for the first time ever into the top 100 rankings on the back of what the World Bank called “sustained business reforms”. At the time, it recognised New Delhi as one of the “top 10 improvers” in that year’s assessment.

In the 2020 report, India jumped 14 places to move to the 63rd position in the global ease of doing business rankings.

Also Read: How Methodology Tweaks, Not Modi’s Magic, Boosted India’s Doing Business Rankings

There is no information in the public domain to indicate that India’s rankings have been affected by these data irregularities that are being currently investigated, although experts have questioned in the past whether changes to the report’s underlying methodology helped boost New Delhi’s performance.

According to the World Bank’s press release, the institution will conduct a “systemic review and assessment of data changes that occurred subsequent to the institutional data review process for the last five Doing Business Reports”.

“The integrity and impartiality of our data and analysis is paramount and so we are immediately taking the following actions…We have asked the World Bank Group’s independent Internal Audit function to perform an audit of the processes for data collection and review for Doing Business and the controls to safeguard data integrity,” the statement noted.

WSJ says China, Saudi Arabia may be affected

The World Bank added that authorities of the countries that “were most affected by the data irregularities” have been informed and that the institution would “retrospectively correct the data of the countries that had been affected by the irregularities”.

A Wall Street Journal report on the development indicated that China, Azerbaijan, UAE and Saudi Arabia are among nations that may have had data “inappropriately altered”.

Past controversies

The World Bank’s ease of doing business rankings first ran into controversy after former chief economist Paul Romer stepped down from his position at the institution for saying that Chile’s rankings had been deliberately skewed under socialist President Michelle Bachelet.

In a series of controversial remarks, Romer alleged that Chile’s decline in the World Bank’s rankings in 2015 were due to methodological changes rather than a deterioration of the country’s business environment. More importantly, he alleged that it may have been the result of the World Bank staff’s political motivations.

Research analysis put out later in 2018 by the Centre for Global Development (CDG), a US-based think-tank that studies global poverty, claimed that India’s spectacular jump in the World Bank’s ease of doing business rankings was misleading and largely due to changes in methodology.

Also Read: We’ve Got the Ease of Doing Business – but for Whom?

“Whichever method we use, once you iron out the methodological changes, India’s recent jump in the Doing Business rankings looks much more modest. To its credit, the World Bank office in Delhi cautioned against focusing on changes in the rankings when this issue reached public prominence in India,” said CGD analysts in a blogpost.

One of the authors, Justin Sandefur, a senior fellow at CGD, later tweeted: “India stands out as another country where Doing Business has been used for very partisan political ends, and — as we show — the gains the World Bank website celebrates are mostly spurious”.

It is unclear whether the latest controversy of “data irregularities” and possible manipulation are related in any way to broader concerns with the Doing Business methodology.