Ease of doing business index

The ease of doing business index was an index created jointly by Simeon Djankov, Michael Klein, and Caralee McLiesh, three leading economists at the World Bank Group, following the release of World Development Report 2002.[1][2][3] The academic research for the report was done jointly with professors Edward Glaeser, Oliver Hart, and Andrei Shleifer. Though the first report was authored by Djankov, Klein, and McLiesh, and they continue to be listed as "founders" of the report, some sources attribute the genesis of the idea to Djankov and Gerhard Pohl.[4][5] Higher rankings (a low numerical value) indicated better, usually simpler, regulations for businesses and stronger protections of property rights. Empirical research funded by the World Bank to justify their work show that the economic growth effect of improving these regulations is strong.[6] Other researchers find that the distance-to-frontier measure introduced in 2016 after a decision of the World Bank board is not correlated with subsequent economic growth or investment.[7]

"World Development Report 2002", the basis of the research behind Doing Business, analyzes how to build effective institutions.[8] In understanding what drives institutional change, the report emphasizes the importance of history, highlighting the need to ensure effective institutions through a design that complements existing institutions, human capabilities, and available technologies. The study was guided by Joseph Stiglitz and Roumeen Islam with principal authors Simeon Dyankov and Aart Kraay. Several background papers, including by Nobel Prize winners Robert Shiller, Amartya Sen and Gabriel García Márquez, were published in academic journals or books.[9][10][11][12][13]

The report was discontinued by the World Bank on September 14, 2021 following an audit documenting how bank leadership pressured experts to manipulate the results of the 2018 and 2020 reports.[14][15][16] Several organizations have proposed replacements, including the Antigua Forum, the World Bank, and the Fraser Institute.[17][18][19][20] In 2023 the Templeton Foundation extended a grant to Professor Robert Lawson at Southern Methodist University to propose a methodology for restarting the project in academia.[21]

The World Bank released the methodology for the replacement of the index in May 2023. For each of the twelve topic areas, the document provides the motivation, selected indicators, detailed questionnaires, benchmarking parameters, detailed scoring rules, and data collection sources. The World Bank conducted a series of methodology workshops worldwide. Their main purpose was to provide a detailed presentation on the project’s methodology, including overall scope and topic-specific information. The workshops also served to raise awareness about this new benchmarking initiative and disseminate its potential for reform advocacy, policy advice, and development research. The relaunch took place in October 2024 under the moniker "Business Ready," after two delays.[22][23]

World Bank's Ease of Doing Business index map for 2020
  ≥ 85.0
  80.0–84.9
  75.0–79.9
  70.0–74.9
  65.0–69.9
  60.0–64.9
  55.0–59.9
  50.0–54.9
  45.0–49.9
  40.0–44.9
  35.0–39.9
  30.0–34.9
  ≤ 25.0
  Data unavailable
  1. ^ Simeon Djankov; Caralee McLiesh; Michael Klein; World Bank; International Finance Corporation (2004). Doing business in 2004: understanding regulation. Washington, D.C.: World Bank. ISBN 0-585-47855-4. OCLC 53443764. Doing Business in 2004 was prepared by a team led by Simeon Djankov. Caralee McLiesh co-managed development and production of the report. The work was carried out under the general direction of Michael Klein. Simeon Djankov coordinated the work on starting a business and hiring and firing workers. Caralee McLiesh led the work on getting finance.
  2. ^ "Founders". World Bank. Retrieved 30 June 2021.
  3. ^ Djankov, Simeon (February 2016). "The Doing Business Project: How It Started" (PDF). Journal of Economic Perspectives. 30 (1): 247–248. doi:10.1257/jep.30.1.247. ISSN 0895-3309.
  4. ^ "Doing Business - Measuring Business Regulations - World Bank Group". Doing Business. 30 December 2011. Retrieved 20 May 2013.
  5. ^ Okwudili Iweama, Vincent; Chukwuemeka Idoko, Edwin; Musa Muhammad, Yusuf (2021). "Effect of ease of doing business dimensions on foreign direct investment in Nigeria". SCIREA Journal of Management. 5 (2): 34–52. doi:10.54647/management63054.
  6. ^ "Doing Business report series – World Bank Group". Doingbusiness.org. Retrieved 20 May 2013.
  7. ^ Adhikari, Tamanna; Whelan, Karl (2023). "Did raising doing business scores boost GDP?". Journal of Comparative Economics. forthcoming.
  8. ^ Djankov, Simeon (February 2016). "Doing Business How it Started" (PDF). Journal of Economic Perspectives. 30 (1): 247–248. doi:10.1257/jep.30.1.247.
  9. ^ Djankov, Simeon, et al., "Courts", Quarterly Journal of Economics, 2003, 118 (2): 453-517.I
  10. ^ Djankov, Simeon, et al., "Regulation of Labor", Quarterly Journal of Economics, 2004, 119 (4): 1339-1382
  11. ^ Djankov, Simeon, et al., "Debt Enforcement Around the World", Journal of Political Economy, 2008, 116 (6): 1105-1150.
  12. ^ Djankov, Simeon, Caralee McLiesh, Tatiana Nenova, and Andrei Shleifer. 2003. "Who Owns the Media?", Journal of Law and Economics 46 (2): 341-381.
  13. ^ World Bank, "The Right to Tell: The Role of Mass Media in Economic Development." 2002, June.
  14. ^ "World Bank Group to Discontinue Doing Business Report". World Bank. Retrieved 16 September 2021.
  15. ^ Zumbrun, Josh (16 September 2021). "World Bank Cancels Flagship 'Doing Business' Report After Investigation". Wall Street Journal. ISSN 0099-9660. Retrieved 16 September 2021.
  16. ^ Machen, Ronald; Jones, Matthew; Varghese, George; Stark, Emily. "Investigation of Data Irregularities in Doing Business" (PDF).
  17. ^ "Antigua Forum 2023 Project Summaries" (PDF). Antigua Forum. 19 January 2023.
  18. ^ "Pre-Concept Note Business Enabling Environment" (PDF). World Bank. 8 February 2022.
  19. ^ "Business Enabling Environment". World Bank. Retrieved 20 January 2023.
  20. ^ "Doing Business 2.0 A Better Guide for Policy Makers". Fraser Institute. 27 July 2022. Retrieved 10 January 2023.
  21. ^ "Professor Robert Lawson Received a Templeton Foundation Grant". SMU Business Forum. 23 June 2023.
  22. ^ "Business Ready (B-READY)". World Bank. Retrieved 14 September 2023.
  23. ^ "B-Ready: ITUC condemns World Bank's newly launched Index for its "dangerous" ranking of countries' labour policies". ITUC. Retrieved 9 October 2024.