December 2, 2021

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The World Bank is replacing Doing Business

The World Bank is replacing Doing Business

WASHINGTON, Nov. 10 (TASR) — The World Bank (WB) plans to release in about two years a compensation for each country’s key business environment assessment, which was lifted after a data manipulation scandal. The bank’s chief economist, Carmen Reinhart, announced this on Wednesday.

In September, the bank was shaken by a scandal linked to the Doing Business order, which ranked countries based on business conditions, regulations and economic reforms.

However, a report by independent investigators revealed inconsistencies in the 2018 and 2020 data. A more appropriate light is in publishing a closely watched list of business conditions.

Reinhart, who was promoted to senior management in an effort to restore confidence in the World Bank, also said that some of the key concepts for the new product were already clear.

These include greater transparency in the underlying methodology, greater reliance on survey data from companies, and less emphasis on country rankings.

The Bank will place more emphasis on survey data to reduce the role of judgment and eliminate the “competition” aspect of ratings, which has motivated countries to “I play within the system”Reinhart commented.

The bank’s board of directors rescinded its Doing Business rating after the scandal.

However, law firm WilmerHale is still working on a second report of potential misconduct regarding data changes that have benefited not only China, but Saudi Arabia and other countries as well.

The IMF board supported Georgiev after a lengthy examination of the allegations in his position, but since the investigation has not yet been completely closed, it can still be mentioned in the second report.

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Kristalina Georgieva, photo from the archive.
Photo: TASR/AP

According to Reinhart, this case has undermined the credibility of the World Bank and it will take time and effort to restore confidence.

“It is important that confidence measures not be based on personality, but rather on system.” She added that the bank took a number of measures and guarantees after examining several external reports.

Reinhart commissioned a large-scale external review of its Doing Business methodology after the bank raised internal concerns about data manipulation.

The 84-page meticulous analysis required a series of corrective actions and repairs. He blames the bank for the lack of transparency in underlying data and argues that it should stop selling advisory services to governments trying to improve their results. However, according to Reinhart, this process has already been discontinued in 2020 and 2021.

Reinhart added that after completing the second report from WilmerHale, the bank will look closely at the consequences of the scandal and consider further action needed.