Good Place in Rating "Doing Business" Not a Panacea

In recent years, the ranking "Doing Business" World Bank (WB) has become an important event in the economic and political life of the country. The government in particular is often quick to highlight the progress of Mauritius in the rankings to justify the business policy of economic openness since 2005. But the usefulness of this table is increasingly challenged, and especially the belief that good performance in the "Doing Business" is synonymous with economic growth. Several organizations even claim that the economic reforms undertaken by countries to improve their rankings have a negative impact on small and medium enterprises.

To begin, you should know that the classification is composed of ten indicators: starting a business, the granting of building permits, connection to electricity, transfer of property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency (the index of hiring workers was omitted from the rankings this year). To boost their performance in the "Doing Business" , many countries such as Mauritius, which is reflected in this year's 16th place, have introduced reforms to improve their score in many of these indicators. But the problem is that there is very little evidence that high in those areas established by the BM Rating guarantee economic growth.

"According to econometric research, the ten indicators that make up the rankings 'Doing Business', there is one who has a strong relationship with growth, namely that relating to entrepreneurship," says Peter Chowla, coordinator BrettonWoods Project, an organization that advocates for reform of the World Bank and International Monetary Fund. In this category precisely, Mauritius happens between the United States and Kyrgyzstan in the 14th position. But what is the other indicators - such as the granting of building permits, the transfer of property and obtaining loans - the evidence is less conclusive, according to our interlocutor. The opposite would be true even.

"Regarding other indicators, there is little evidence that they are correlated with growth. This is not to speak of causation, that is to say, it is a reform that aims to facilitate the creation of enterprises stimulate growth? And what about the fact that a government that promotes this kind of economic policy, may also tend to favor other policies that actually encourage the growth? " is he asked.

This opinion is shared by the President of the Association of Small and Medium Enterprises, Amar Deerpalsing: "On behalf of the openness of the economy, we eliminated all import quotas and tariffs without implementing guard safeguards to protect local businesses. "

In June, Peter Chowla had co-authored a letter in The Economist Christina Chang CAFOD, in which they have involved an article previously published in the weekly stating that "'Doing Business' pushes countries to introduce useful reforms" . In this correspondence, they wanted to qualify the relevance of ranking: "Unfortunately, it also pushes the country to play the classification and introduce dangerous deregulation that hurt small businesses in developing countries. The bank herself (WB, Editor's note) recognizes that 'Doing Business' is not a model for reform. "

This last statement is the result of an audit report "Doing Business" published last month by an independent panel. Among its conclusions: the ranking may be misinterpreted, it takes information from sources "close" the methodology of data collection is poor. "It should not be seen as a 'one-sizefits-all' model of development, " says the document.

Amar Deerpalsing goes even further. "It's a bait and switch. People talk about globalization, but when we see the reluctance of the United States and the EU to renegotiate multilateral Union, we realize that this is one way, " he says.