World Bank President Jim Kim and the World Bank board will in the next few weeks receive a report about the future of the “Doing Business” report that will be critical in determining the future of the bank’s signature project to encourage private sector development. Forces inside the bank — most notably, China — have …
World Bank President Jim Kim and the World Bank board will in the next few weeks receive a report about the future of the “Doing Business” report that will be critical in determining the future of the bank’s signature project to encourage private sector development. Forces inside the bank — most notably, China — have tried to scuttle the Doing Business report, which ranks countries on the ease of starting and running a business, and it is now up to Kim to ensure the report survives intact.
Countries loathe to embrace private enterprise as the main driver of development have attempted to weaken, outsource, or do away with the report, an effort that has crystallized in the forthcoming report about the future of Doing Business. As a trained medical doctor, Kim is well familiar with the Hippocratic Oath and its dictate to “do no harm,” and in coming weeks he will have the chance to live up to that pledge and save an important aspect of the bank’s development agenda.
The bottom line is that Doing Business is one of the World Bank’s most important and useful activities. For the United States, it is one of the top five most important programs at the World Bank. Messing with Doing Business should be a line in the sand for the bank.
I expect one of three outcomes from the panel’s report: crippling several of the critical indicators, ending Doing Business altogether, or outsourcing Doing Business to something like the World Economic Forum. These are all bad outcomes for development, the World Bank, and the United States.
Sources inside the World Bank that Kim has said privately that his “hands will be tied” by the panel’s report, but there are several other factors that the Bank’s leadership should take into consideration in their decision.
First, Kim should review the open letter authored by Paul Collier, Daron Acemoglu, Graeme Wheeler, Michael Klein, and Simon Johnson, five heavyweights in the development community who strongly support Doing Business. Currently, the letter has been signed by 50 former and current policymakers, prominent economists, and others from all over the world.
Additionally, Doing Business is broadly popular on both sides of the aisle in Congress. Last week, Chairman of the House Foreign Affairs Committee Ed Royce and Jeb Hensarling, the chairman of the House Financial Services Committee, sent a letter, which was also signed by the Democratic Reps. Gregory Meeks and Karen Bass, encouraging Kim to keep the Doing Business report intact. That letter is embedded at the bottom of this post.
Jim Kim has the power in World Bank board meetings to offer a summation and to provide his interpretation of the board’s consensus. He should exercise that power to defend Doing Business. I have seen him push back on other silly ideas by leveraging his moral authority as someone from the NGO community. Now is the time to say, ” I am from the NGO community, I have seen what crony capitalism can do, I have seen what corruption has wrought, I am for a data driven and evidence based approach to development, and I believe the private sector is the driver of development. Therefore, I conclude that the bank will continue to run and grow Doing Business.”