Ease of Doing Business Ranking

The Ease of Doing Business ranking originated with the World Bank Group's Doing Business report, first published in 2003 under the leadership of economist Simeon Djankov and grounded intellectually in his 2002 paper "The Regulation of Entry." The project was housed within the International Finance Corporation and the World Bank's Development Economics group, and it ranked economies — 190 in its final editions — on the regulatory cost of operating a small-to-medium domestic firm. The methodology drew on the legal-origins literature associated with Andrei Shleifer and Rafael La Porta, which posited that the texture of commercial regulation measurably affects investment, formalization, and growth. Unlike treaty-based indices, Doing Business rested on no statutory authority; it was a research product whose influence derived entirely from its adoption by governments, investors, and credit-rating analysts as a shorthand for the investment climate.

The ranking aggregated performance across ten indicator sets, each measuring a discrete regulatory transaction: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. For most indicators the Bank used a standardized case study — a hypothetical limited-liability company in the country's largest business city — and counted the number of procedures, the elapsed days, and the cost as a percentage of income per capita required to complete each transaction. These granular measures were converted into a "distance to frontier" score (later renamed the ease of doing business score) running from 0 to 100, where 100 represented the best regulatory practice observed across all economies. Countries were then ordinally ranked by that aggregate score, and an annual report narrated the year's reformers.

Data came principally from a network of local respondents — corporate lawyers, accountants, notaries, and government officials — who answered detailed questionnaires, with the Bank reconciling responses against statutes and fee schedules. From 2015 the Bank expanded coverage in large federal economies by surveying a second city: in India, both Delhi and Mumbai were measured. The index deliberately excluded macroeconomic conditions, infrastructure quality, market size, security, and corruption, focusing narrowly on de jure and de facto regulatory friction. This narrowness was a design choice that made the distance to frontier scores comparable across years and amenable to a reform-tracking narrative, but it also meant the ranking captured only a sliver of what determines actual investment decisions.

The ranking acquired outsized political salience in several capitals. In New Delhi, the government of Narendra Modi made improvement on the index an explicit governance target after 2014; India rose from 142nd in the 2015 report to 63rd in the 2020 edition, a climb the Department for Promotion of Industry and Internal Trade publicized heavily. India domesticated the logic through the Business Reform Action Plan, under which the DPIIT and the World Bank ranked Indian states and union territories on implementation of reform measures — a deliberate exercise in competitive federalism that pitted Andhra Pradesh, Telangana, Gujarat, and others against one another. Georgia, Rwanda, and Kazakhstan similarly built reform programs and ministerial units explicitly around climbing the rankings, and the report's "Doing Business reformer of the year" designation became a coveted diplomatic credential.

The Ease of Doing Business ranking must be distinguished from adjacent measures it was frequently confused with. It is not the World Economic Forum's Global Competitiveness Index, which incorporated infrastructure, health, innovation, and macroeconomic stability across a far broader survey base. It differs from Transparency International's Corruption Perceptions Index, which measures perceived public-sector graft rather than regulatory procedure. And the Bank's own Doing Business should not be conflated with the Worldwide Governance Indicators, a separate Kaufmann–Kraay dataset on voice, rule of law, and government effectiveness. The defining feature of the Ease of Doing Business ranking was its reliance on standardized procedural case studies rather than perception surveys or composite governance constructs.

The index ended in controversy. In August 2020 the World Bank paused publication after detecting data irregularities, and in September 2021, following an independent investigation by the law firm WilmerHale, the Bank discontinued Doing Business entirely. The investigation found that scores for China (in the 2018 report) and for Saudi Arabia, the United Arab Emirates, and Azerbaijan (in the 2020 report) had been manipulated under pressure from senior management; the episode implicated then-CEO Kristalina Georgieva, by then Managing Director of the IMF, who disputed the findings. The Bank announced a successor methodology, the Business Ready (B-READY) project, with a redesigned framework covering regulatory frameworks, public services, and operational efficiency, and pledged greater transparency and broader firm-level data; its first reports appeared from 2024.

For the working practitioner, the Ease of Doing Business saga is a cautionary study in the political economy of benchmarking. The ranking demonstrated that a single ordinal number could mobilize genuine regulatory reform — digitized company registration, single-window clearances, faster insolvency resolution — while simultaneously incentivizing "teaching to the test," where governments optimized the measured case study rather than the broader investment environment. Desk officers covering economic diplomacy, investment promotion, or development finance should treat both the historical Doing Business scores and the forthcoming B-READY results as informative but partial, vulnerable to methodological revision and institutional pressure, and best read alongside firm surveys, sectoral data, and on-the-ground legal practice rather than as a standalone verdict on a country's business climate.