I didn’t know whether to laugh or to cry about these comments about the World Bank’s Doing Business rankings from the editors of the Wall Street Journal:
Underwhelming is the most charitable way to describe the World Bank’s contribution to reducing global poverty over 75 years. And now the organization’s most useful service, its annual Doing Business ranking, has been shelved, thanks to some untoward lobbying by China.
The survey, first published in 2003, “measures aspects of business regulation affecting small domestic firms located in the largest business city of 190 economies.†It covers a wide range, from registering a business to resolving bankruptcy. This massive undertaking involves nearly 50,000 experts across the globe, and its conclusions guide perhaps billions of dollars of investment.
But an independent investigation by the law firm WilmerHale has concluded that former World Bank CEO Kristalina Georgieva and other leaders pressured staff to improve China’s Doing Business 2018 ranking. World Bank management commissioned the probe after data irregularities were reported internally last year. The report says China rose seven places after the changes. China ranked 31st in the 2020 report, which was ahead of Switzerland in 36th. Does that sound plausible for a regime that considers business a servant of the state?
There are so many problems with the Doing Business rankings it’s hard to know where to start. Not to put too fine a point on it but it’s completely bogus. Of the 100 largest cities in the world 20 are in China, more than any other country. India comes in #2 at 9 with the U. S. #3 at 6. Most of the cities used in the rankings don’t even make the list of 100 largest cities. Many wouldn’t even make the list of 200 largest cities.
China’s largest city, Shanghai, has 26 million people. That’s more than all of the higher-ranking cities in the index put together. Wellington, New Zealand, one of the cities used the rankings (New Zealand ranks highest), has 212,000 people. I don’t honestly see how a meaningful comparison could be made. That’s not just comparing apples to oranges, it’s comparing watermelons to blueberries.
But there is an interesting question that emerges from this story: why would the Chinese authorities care? There is an answer and it’s one that should be kept in mind. For the Chinese authorities it’s not enough for China to be the best or the biggest, China must also be perceived as the best and the biggest. Once you recognize that it explains a lot.
