At issue is the Doing Business Index, in which the bank’s private unit, the International Finance Corporation (IFC), ranks 178 countries on how conducive they are to private enterprise. Those that make it easiest to start and run a private enterprise, as measured by 10 indicators, earn the highest marks.
So flawed is the exercise, launched in 2004 as what the bank calls a major “knowledge product”, that one executive director at the lending agency has suggested that the new critique be included as part of the Doing Business report so users would know not to take the rankings too seriously.
Even so, developing and former Soviet economies in particular perform legal and political contortions to improve their ranking in hopes of boosting foreign investment and with the expectation — stoked by the bank — that increased business activity will translate into faster economic growth.
