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How accurate are the Doing Business indicators? A Pacific Island case study

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  • Paul Holden
  • Alma Pekmezovic

Abstract

While there have been several attempts to measure the investment climate, by far the most widely recognised measure is the World Bank's Doing Business indicators (DBIs), ranking some 200 countries on their ease of doing business. Methodological criticisms have failed to dent their stature. This article is based on case studies of Pacific Island countries that demonstrate that identical reforms in different countries are assigned rankings so widely divergent that they call into question the validity of the DBIs. The findings cast doubt on targeting improved DBI rankings as a policy goal. Our case studies are the first to provide detailed country evidence supporting the criticisms levelled against the DBIs on conceptual grounds.

Suggested Citation

  • Paul Holden & Alma Pekmezovic, 2020. "How accurate are the Doing Business indicators? A Pacific Island case study," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 7(3), pages 247-261, September.
    • Handle: RePEc:bla:asiaps:v:7:y:2020:i:3:p:247-261
    DOI: 10.1002/app5.313
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    References listed on IDEAS

    as
    1. Aart Kraay & Norikazu Tawara, 2013. "Can specific policy indicators identify reform priorities?," Journal of Economic Growth, Springer, vol. 18(3), pages 253-283, September.
    2. Holden, Paul & Holden, Sarah & Malcolm, Bale, 2004. "Swimming Against the Tide," MPRA Paper 4207, University Library of Munich, Germany.
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    4. Mary Hallward-Driemeier & Lant Pritchett, 2015. "How Business Is Done in the Developing World: Deals versus Rules," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 121-140, Summer.
    5. Jamal Ibrahim Haidar & Takeo Hoshi, "undated". "Implementing Structural Reforms in Abenomics: How to Reduce the Cost of Doing Business in Japan," Working Paper 316046, Harvard University OpenScholar.
    6. Tor Krever, 2013. "Quantifying Law: legal indicator projects and the reproduction of neoliberal common sense," Third World Quarterly, Taylor & Francis Journals, vol. 34(1), pages 131-150.
    7. Timothy Besley, 2015. "Law, Regulation, and the Business Climate: The Nature and Influence of the World Bank Doing Business Project," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 99-120, Summer.
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    10. Adrian Corcoran & Robert Gillanders, 2015. "Foreign direct investment and the ease of doing business," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(1), pages 103-126, February.
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    Cited by:

    1. Almeida, Lucila de & Esposito, Fabrizio & van Zeben, Josephine, 2022. "When indicators fail electricity policies: Pitfalls of the EU's retail energy market Barrier Index," Energy Policy, Elsevier, vol. 165(C).
    2. Talea Bernatzki & Matthias Busse & Ruth Hoekstra, 2022. "Promoting Rwanda’s business environment: Impact of reforms and drivers of change," Development Policy Review, Overseas Development Institute, vol. 40(2), March.

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