For nearly two decades, the World Bank’s Doing Business report was the gold standard for assessing the ease of doing business in nearly 190 economies. Serving as a catalyst for regulatory reform and economic liberalisation worldwide, the report provided policymakers, investors, and researchers with an invaluable tool for benchmarking business environments.
However, controversies surrounding data manipulation led to the discontinuation of the report in 2021. As the World Bank pivots towards a new initiative, the Business Enabling Environment (BEE) project, this article examines the report’s rise, its impact on emerging markets like India, and the critical lessons learned to shape the future of global business evaluation.
The Rise of Doing Business
Launched in 2003, the Doing Business report quickly evolved into a critical resource for understanding the regulatory landscape affecting businesses around the world. The rankings were built on ten indicators, which included factors such as:
- Starting a Business: The procedures, time, and cost required to officially register a business.
- Dealing with Construction Permits: The process involved in obtaining necessary permits.
- Getting Electricity: The ease of securing a reliable power supply.
- Registering Property: The time and steps required for property registration.
- Getting Credit: Measures of access to credit resources.
- Protecting Minority Investors: The safeguards provided for minority shareholders.
- Paying Taxes: The administrative burden and cost of taxation.
- Trading Across Borders: The ease of exporting and importing goods.
- Enforcing Contracts: The efficiency of the judicial process for resolving business disputes.
- Resolving Insolvency: The procedures for handling corporate insolvency.
These indicators not only influenced government policies but also spurred reforms in emerging markets, pushing countries to lower bureaucratic hurdles and improve overall transparency in business regulation.
India’s Journey in Doing Business
India’s evolution in the Doing Business rankings has been nothing short of remarkable. In the early 2010s, India lagged significantly due to cumbersome regulatory frameworks and an opaque business environment.
Over the years, however, successive government reforms—ranging from streamlined business registration processes to the digitalisation of property records—helped India climb the rankings dramatically. By 2020, India had improved its standing substantially, a move that not only bolstered domestic investor confidence but also attracted significant foreign direct investment (FDI).
Key reforms that propelled India’s rapid progress included:
- Digital Transformation: Adoption of digital platforms for everything from company registration to tax filing.
- Comprehensive Policy Reforms: Introduction of the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC) that improved financial transparency and streamlined dispute resolutions.
- Infrastructure Investments: Enhanced logistics and power supply systems that created an enabling environment for business growth.
The success of these reforms positioned India as a model for emerging economies aiming to liberalise and modernise their economies. However, the acclaim and reliance on the Doing Business report were not without challenges.
Controversy and Discontinuation
In 2021, an internal investigation by the World Bank revealed discrepancies and instances of data manipulation in the Doing Business report. Evidence emerged that certain senior officials had altered data under pressure from high-profile stakeholders, casting doubt on the credibility of the rankings. As a consequence, the World Bank decided to discontinue the report, sparking widespread debate about the role and reliability of global economic rankings.
The discontinuation of the report marked the end of an era. For many countries—especially emerging markets like India—Doing Business had been instrumental in framing economic reforms and influencing investment flows. Its termination left a significant gap in global benchmarking and raised questions about how to objectively assess business environments in the future.
The New Direction: Business Enabling Environment (BEE) Project
In response to the controversies, the World Bank announced plans for a new initiative known as the Business Enabling Environment (BEE) project. Unlike the previous report, BEE aims to focus on a broader and more inclusive set of metrics that go beyond regulatory ease. By integrating data on digital infrastructure, innovation, labour market flexibility, and resilience against economic shocks, the BEE project promises to offer a more comprehensive view of a country’s ability to foster and sustain business growth.
Key Aspects of the BEE Project:
- Holistic Data Collection: Moving away from a singular focus on procedural metrics, BEE will incorporate a wider range of indicators reflecting the real-life experiences of businesses.
- Inclusive Methodology: The new approach will better account for variations between urban and rural business environments and will be more sensitive to the nuances of different economic systems.
- Greater Transparency: To avoid past pitfalls, the BEE project will employ rigorous data validation processes and ensure full transparency in its methodologies.
- Stakeholder Engagement: Continuous feedback from businesses, investors, and policymakers will be a cornerstone of BEE, ensuring that the rankings reflect on-ground realities accurately.
Global Implications and the Future of Benchmarking
The evolution from Doing Business to the BEE project represents a significant shift in how global economic environments are evaluated. While the former focused primarily on streamlining procedures, the new initiative aims to capture a more dynamic and multi-dimensional view of what it means to enable business. This transition is critical in an increasingly complex global economy where technological advancements, environmental challenges, and rapid urbanisation are redefining business practices.
For countries like India, which have leveraged their improving rankings to attract FDI and drive reforms, the new BEE project promises continued recognition and a renewed focus on sustainable growth. By embracing this comprehensive approach, India can further enhance its competitiveness, ensure better policy outcomes, and sustain the momentum of its economic reforms.
The legacy of the World Bank’s Doing Business report is profound, having spurred transformative reforms across the globe. Although its discontinuation was a sobering reminder of the challenges inherent in global benchmarking, it has paved the way for the next generation of evaluation tools through the BEE project.
As India continues to evolve and strengthen its business environment, innovative and holistic frameworks like BEE will be essential for guiding future reforms and attracting global capital. In the dynamic and ever-changing landscape of international business, staying ahead means continually adapting and refining the tools that measure success. The journey from Doing Business to BEE is not just a shift in metrics—it is a step toward a more resilient, inclusive, and sustainable economic future.