Homepage / Currency / The World Bank’s “ease of doing business” report faces tricky questions
Google and Facebook are watching our every move online. It's time to make them stop Daymond John tells shy airline passenger: You should have talked to me on the plane South Korea says it has no plans to shut down cryptocurrency trading AMD shares surge as Wall Street analysts say the chipmaker is ‘executing on all fronts’ James Altucher, the face of bitcoin, says he’s happy about Facebook’s cryptocurrency ad ban Pending home sales eke out 0.5 percent gain in December as supply shrinks to record low Uber is testing bike sharing in San Francisco The real source of the internet's problems might be the advertising business Game publisher EA's sales forecast tops estimates, sending shares higher GE will likely be dropped from the Dow, Deutsche Bank predicts Samsung surpasses Intel as world's biggest chipmaker for the first time Apple could be the best of the bunch in this tech earnings avalanche The 9-year stock rally still has 'years left,' says one of Wall Street's most bullish strategists Apple: We would never degrade the iPhone experience to get users to buy new phones Bitcoin headed for biggest monthly drop since January 2015 with nearly $60 billion of value wiped off ADP boosts forecast as new tax law spurs demand China 'will open even wider to the UK,' says Prime Minister Li Keqiang Big market swings are something you’re going to have to get used to, says Wells Fargo The dollar keeps weakening. Is that good news for the world? Apple downgraded by BMO, expects iPhone maker to slash revenue forecast this week SoftBank buys majority stake in Japanese messaging giant Line’s mobile division Rising interest rates cause a 2.6% pullback in weekly mortgage applications Trump's State of the Union address 'less hard' than first feared in Asia Trump vows to protect US intellectual property, without naming China Blockchain technology to boost Microsoft earnings, trader says Fujifilm to take over Xerox and combine it into the joint venture Fuji Xerox Samsung is making chips designed to mine cryptocurrencies like bitcoin There’s a risk of market turbulence, but it’s unlikely to hit until 2019, says Santander chairman We'll see up to a 15 percent correction in 2018, Swiss bank CEO says Japan's biggest messaging app Line is planning to launch a cryptocurrency exchange Quicksilver surfwear CEO missing at sea off the coast of France Venezuela says will pre-sell 'petro' cryptocurrency on Feb. 20 Nintendo ups its Switch sales expectations to 15 million units after profits rise 261% European markets seen mixed amid earnings and economic data The UK wants free trade with China. Beijing has its own goals Santander fourth-quarter net profit down 4 percent on US impairments The man who almost became ambassador to South Korea just warned about US plans for North Korea China's Leshi Internet flags $1.8 billion loss for 2017, citing conglomerate cash crunch South Korea says it uncovered about $600 million in cryptocurrency crimes Asia became less democratic in 2017 Al Gore's investment firm backs start-up created by Facebook co-founder Theresa May says she wants a free trade deal with China Chinese manufacturing weaker than expected in January Webpass is leaving Boston in latest sign of Google Fiber’s shrinking ambitions Samsung posts record fourth-quarter profit Asian shares look set for more declines as Wall Street sells off for a second day Don't count insurers out yet after Amazon-Berkshire-JP Morgan move Amazon's health care move could be a big win for consumer health start-ups Red Hat buys CoreOS, a start-up that sold tech developed by Google Here’s what Amazon told employees today about its landmark deal to deliver better health care Top official resigns after false missile alert in Hawaii Crazy odds: These online traders bet on the chaos of Washington and the Trump administration AMD falls despite beating Q4 estimates Facebook ban on bitcoin ads latest in very bad day for cryptocurrencies Indian man dies after being sucked into an MRI machine while carrying an oxygen cylinder Advice for Jeff Bezos, Warren Buffett and Jamie Dimon from a failed effort to control health costs Toys R Us poor holiday sales cast doubts on its future and could force renegotiation of loan terms The Apple sell-off is a buying opportunity into earnings, says trader Google partnership on mobile cloud services drives up MobileIron shares Facebook is banning all ads promoting cryptocurrencies — including bitcoin and ICOs Amazon's moves in health care over the last year are finally starting to make sense Buffett is getting a second chance to partner with Bezos after missing on Amazon as an investment How Pencils of Promise got a $1 million donation from an anonymous bitcoin multi-millionaire Amazon's home devices could be a key to cheaper health care, tech investor Roger McNamee says Two ex-Google engineers built an entirely different kind of self-driving car Cryptocurrencies join the global financial market sell-off as bitcoin drops 7% A travel agent is trying to charge fees for sunbeds Most of the tax cut windfall will boost buybacks and dividends, not workers' pockets, survey predicts The professor who wrote the book on making addictive technology is having second thoughts Trump's immigration policies are 'economic poison' that will cost taxpayers billions Airbnb trolls President Trump ahead of the State of the Union The iPhone X's $1,000 price tag scared everyone away Drop, a rewards app start-up, snags Airbnb's former head of engineering SEC halts one of the largest 'ICOs' ever as it wades deeper into the murky world of cryptocurrency offerings Passing on sanctions, Trump goes even softer on Russia than expected Buy insurers on dip as new initiative from Amazon, Berkshire and JP Morgan is ‘more bark than bite’: Analyst High schools stock up on Narcan to combat teen opioid crisis in US Apple will finally replace the fax machine in health care Apple is reportedly delaying new iOS features until next year because of quality problems Bond expert predicts a ‘wall of buying’ in Treasurys will protect the stock market Home prices surge to new high, up 6.2% in November Noted tech investor says the sector is not the best place to invest right now Sterling predicted to hit pre-Brexit vote level before the end of 2018 Stocks making the biggest moves premarket: AMZN, BRKB, JPM, AAPL, BX, TSLA & more Bitcoin boom to give AMD earnings a boost, says MKM Partners Apple shares fall again on another report of fading iPhone X demand Trump advisor Cohn: President to focus on $1.5 trillion infrastructure plan in State of the Union Why don't foreign investors take fright more often? The dollar is doing something it hasn’t done since 1987 UnitedHealth, CVS plunge on Bezos, Buffett and Dimon plan to improve U.S. health care Amazon, Berkshire and JPMorgan Chase to team in landmark new health care company Can earnings afford to slow down? 'Enemies of the USA': Russia slams America's list of oligarchs with ties to Putin The app that exposed the location of military bases with a heat map is reviewing its features For his next act, former Amex CEO Ken Chenault turns his focus on Silicon Valley Child experts: Just say ‘no’ to Facebook’s kids app Ryanair agrees to recognize British pilots union for first time Arab states are 'determined' to stick with reforms despite deepening 'frustration', IMF says The US 'oligarch list' is strikingly similar to Forbes’ richest Russians ranking Indian ride-hailing firm Ola expands to Australia to take on Uber

Currency

The World Bank’s “ease of doing business” report faces tricky questions

HOW many days does it take to correct a misleading newspaper interview? Four, in the case of Paul Romer, the World Bank’s chief economist. On January 12th a surprising article in the Wall Street Journal alleged that one of the bank’s signature reports—on the ease of doing business around the world—may have been tainted by the political motivations of bank staff. The story was based on an interview with Mr Romer, who pointed out that Chile’s ranking in the yearly report had dropped sharply during the presidency of Michelle Bachelet, a left-leaning politician who took office for the second time in 2014. Chile sank so heavily not because doing business had become harder, but because the bank had repeatedly changed its method of assessment.

That method mostly entails answering measurable questions, such as how many days does it take to start a business, register a property or file taxes. The answers determine a country’s score (known as its “distance to the frontier”), and its score, relative to those of other countries, determines its global rank and bragging rights.

  • Are programs better than people at predicting reoffending?

  • How gender is (mis)represented in economics textbooks

  • Sri Lanka’s president is struggling to keep his promises of reform

  • Chechnya moves to silence Oyub Titiev, a courageous critic

  • The Bayeux tapestry is an intriguing symbol of post-Brexit co-operation

  • The rise and fall of bitcoin

From 2014 to 2016, the bank made 12 big methodological changes, broadening some indicators and adding others. “Doing Business 2017” (published in late 2016) was, for example, the first in the series to ask how easily companies can obtain a refund or resolve an error after they have filed their taxes. In that report, Chile was ranked as the 120th easiest place to pay taxes, some 87 notches below its rank in the previous year. No other country fell so dramatically.

The data-gathering and analysis were overseen by a former professor of economics at the University of Chile in Santiago, adding to the suspicion of skulduggery. Supporters of Ms Bachelet, whose coalition lost the recent presidential election, were apoplectic. Some even suggested that Chile’s slide in the rankings had hurt confidence, undermining investment and jeopardising their political prospects.

Four days later, Mr Romer clarified his remarks on his blog, saying that he had not seen any sign of political manipulation and had not meant to suggest he had. But that may not be the end of the matter. Many people are predisposed to think the worst of the bank and its Doing Business reports in particular. Because they rank countries against each other, they have been both unusually influential, spurring governments to cut red tape, and unusually controversial. In some quarters, they are seen as scorecards for a deregulatory race to the bottom. Such critics may not accept Mr Romer’s apology at face value.

Other evidence may reassure them. First, the broadening of the tax indicators can be traced to an independent review of “Doing Business” published in 2013, before Ms Bachelet’s election. Second, not all of the methodological changes hurt Chile’s standing. After four of them, the country’s sub-ranking improved (see chart). Third, Augusto Lopez-Claros, who oversaw the report’s work from 2011-2017, is indeed a former University of Chile professor. But he is not Chilean and lived there for only two years in the early 1980s.

Moreover, the reports did little to highlight Chile’s purported decline. On the contrary: they play down changes in any country’s relative standing. Each new edition mostly avoids mentioning the previous year’s rank. Instead, the first and most prominent table in the report details three things: the country’s current rank, current score and whether that score (not rank) has improved since the previous year. This improvement is calculated using the same, latest method of assessment for both years. This table showed an increase in Chile’s score in each of the past four reports, highlighting an improvement in the ease of doing business under Ms Bachelet.

One final loose end does, however, need tying up: a previously unreported error in one indicator. Chile’s “post-filing” index (which reflects the ease of obtaining tax refunds and resolving errors) was recorded as 5.58 out of 100 in “Doing Business 2017”. According to the bank’s online database, it should have been 57.67. Consequently, Chile’s rank on paying taxes should have been 65th not 120th. But the country need not feel too singled out. The bank’s online database contains over 1,000 revisions and corrections for that report. “Doing Business” is not easy.

Source: economist
The World Bank’s “ease of doing business” report faces tricky questions

Comments are closed.