Lopez-Claros Replies to Charges of Gaming World Bank Rankings

Yesterday I linked to a Wall Street Journal article which reported that the World Bank had gamed its “Doing Business” rankings to make Chile look worse during the years it was governed by a socialist president. Paul Romer, the chief economist of the Bank, promised to review the rankings and republish them without the methodological changes that had hurt Chile’s rankings.

Today, the director of the group that published the rankings, Augusto Lopez-Claros, responded:

As you may know, the Doing Business project was the subject of an external review by an international panel of experts which provided a number of recommendations in 2013. Partly on the basis of these recommendations…the Bank decided to enter into a multiyear process of methodological improvements, to broaden the coverage of the business environment factors captured by the indicators and to better adapt the definition of some of the indicators to ongoing changes in the global economy.

….You noted the deterioration in Chile’s rankings over the past several years. Yes, it is the case that some of this deterioration reflects some of the methodological changes introduced….But Chile’s rankings also deteriorated because other countries were doing more during the period you focused on. To take an example, if you look at the reports DB2014 through DB2017, you will see that Chile introduced a total of 2 reforms during this 4-year period, whereas Mexico introduced 8 and Colombia 6. Not surprisingly, Mexico overtook Chile as the country with the best business environment in Latin America, as captured by the Doing Business indicators.

….The claim that the above methodological changes somehow targeted Chile is wholly without merit. You may be aware that during the last several years the World Bank negotiated with the Bachelet administration the opening of a research hub in Santiago, the first such center in Latin America….That the Bank or its staff, during the middle of the negotiations that led to the establishment of this center would have targeted Chile to adversely affect its Doing Business rankings is bizarre beyond measure….Chile’s ranks in the last several years have dropped for the reasons outlined above. None other.

Lopez-Claros’s full reply is here. It’s pretty obvious that there’s some significant internal politics going on here, and obviously I’m in no position to evaluate it. I’m sure we’ll hear more about this shortly.