Doing Business and Country Reforms
                                  An IEG Evaluation on the Development Effectiveness
                                  of the Use of Doing Business Indicators FY 2010-2020

                                            Report to the Board from the
                                        Committee on Development Effectiveness ∗


                                              Meeting of December 8, 2021

       The Committee on Development Effectiveness met to consider the IEG’s report Doing Business and
Country Reforms- An IEG Evaluation on the Development Effectiveness of the Use of Doing Business Indicators
FY 2010-2020 (CODE2021-0067), World Bank Management Response (CODE2021-0068) and IFC Management
Response (CODE2021-0069).

         The Committee commended IEG for the comprehensive evaluation and appreciated IEG’s commitment to
review and correct any facts or misrepresentations in the draft before its public disclosure. IEG noted the
implications of its findings and recommendations for new business environment indicators, including connecting
the design of new indicators and diagnostics strongly to research and country experience, using new indicators
alongside complementary analysis to help inform well-designed and comprehensive reforms focused on binding
constraints, rather than as ends of themselves; and assuring that claims made linking reforms captured by the
indicators are validated by robust evidence.” Members noted that while the Doing Business (DB) flagship report
has been discontinued, enabling a business environment remains a relevant task for the WB and IFC and that
important lessons could be drawn by the rich and high-quality analysis to shape the strategic focus and design of
the new approach, including connecting policy advice more strongly to research and data and deploying appropriate
safeguards to assure accuracy and validity of indicators, focusing on de jure regulations along with their de facto
implementation. Therefore, they encouraged Management to deploy appropriate mechanisms and safeguards to
assure the accuracy and validity of global indicator-based reports using robust and transparent standards of evidence
and that indicators should be considered and interpreted along with complementary diagnostics and analytics,
updated periodically and tailored to country contexts. Members stressed that the evaluation’s findings and lessons
on the creation and use of indicators were still timely and should thus be used to shape the strategic focus and design
of the World Bank’s new approach to global indicators on business reform and investment climate.

        Given that the Doing Business Report (DBR) was one of the WBG’s most widely read publications and
most utilized set of indicators on business regulations to motivate clients to engage in business environment reforms,
members and non-members reiterated that the process of designing a successor to the DBR should be a
comprehensive one and stressed the need for Management to consult the Board and client countries. They
highlighted that the original objectives of the DBR remain relevant and encouraged Management to incorporate in
the new approach the positive features found in the evaluation as well as IEG’s conclusions as well as the
conclusions of other recent evaluations on the DBR, in particular on validity, relevance, and the need to focus more
on binding constraints, sustainability, and issues such as working conditions. Members acknowledged that the
engagement with the Board on the new approach would begin with the informal meeting scheduled on January 18,
2022.

        Members agreed that movements in indicators should be interpreted carefully and encouraged Management
to ensure that country strategies, policies and development agendas reported reform implementation
accurately. They suggested that complementary sources of data, as well as analytical guidance, should be used to
validate the relevance of the reform topics. Acknowledging that the DB indicators had had strong weight on de jure
information (according to statutory laws and regulations), Management reassured members that the new approach
would seek for better balance with de facto indicators, including surveys on the ground, for a better match between
regulations and business practice.



∗
    This report is not an approved record.