The Importance of Doing Business

MADRID – This month, an independent review panel is expected to release its findings regarding the World Bank’s Doing Business report. Speculation abounds that the panel might recommend outsourcing Doing Business, removing its rankings of countries for the ease of doing business in them, or even eliminating the report altogether.

This challenge is not a new one, as powerful World Bank shareholders have been trying to sink the project since its inception in 2002. Now China, the world’s second-largest economy and increasingly influential within the Bank, is seeking to water down the report by eliminating, among other things, its country rankings. (This year, Doing Business ranked China 91st out of the 185 national economies it examined.)

But gutting or cutting Doing Business would be a grave error and would essentially result in throwing a healthy baby out with the bathwater. Its methodology is largely sound, its purposes are valid, and its findings are useful.

The 2013 report includes quantitative data grouped in 11 sets of indicators, ranging from the ease of starting a business to the availability of credit. The data are compared across economies and over time to rank 185 countries in ten categories of business regulation, such as “Resolving Insolvency” and “Trading Across Borders.” Input from respondents around the world – more than 9,600 this year – influences the report’s conclusions.