What the Ease of Doing Business Index Was
The Ease of Doing Business index was the World Bank’s annual ranking of economies by the friendliness of their business regulations, published in the Doing Business report from 2003 until its discontinuation in 2021. At its peak it ranked 190 economies and was one of the most influential rankings ever produced — governments formed task forces specifically to climb it.
Its history is now a dual legacy: a landmark regulatory benchmark, and the canonical cautionary tale about ranking integrity.
What the Index Ranked
The index ranked economies by how easily a standardized small-to-medium domestic company could navigate regulation across the business lifecycle:
- Starting a business, dealing with construction permits, getting electricity
- Registering property, getting credit, protecting minority investors
- Paying taxes, trading across borders, enforcing contracts, resolving insolvency
Core Inputs Used by the Index
- Case-study scenarios — each topic measured the procedures, time, and cost for a hypothetical standard company (e.g., a warehouse-permit case in the economy’s largest business city)
- Expert questionnaires — thousands of local lawyers, accountants, and officials verified the regulatory facts
- Legal texts — for rights-based indicators like investor protection and credit information
The index measured the rules on the books for a standardized case — deliberately not the messy reality of every firm.
How the Index Was Calculated (High-Level)
- Each topic’s indicators were converted to a distance-to-frontier score — 0–100 against the best observed performance.
- Topic scores averaged into the economy’s overall ease-of-doing-business score.
- Economies were ranked by that score — with the ranking, rather than the score, becoming the public obsession.
Conceptual model: Run the same fictional company through 190 regulatory obstacle courses and rank the course designers.
Update Frequency
The report was published annually (2003–2020), each edition revising indicator details and recalculating scores.
Known Limitations and the 2021 Discontinuation
- Case-study abstraction — a standardized company in the largest city could diverge far from most firms’ reality
- Law vs. practice — formal rules measured well; informal implementation barely at all
- Rank-seeking distortions — governments optimized measured indicators rather than underlying conditions — a textbook Goodhart’s-law case
- The data-integrity scandal — an external investigation (the WilmerHale review) found that Bank leadership had pressured staff to alter data and unduly affect certain countries’ scores in the 2018 and 2020 reports. In September 2021 the World Bank discontinued the report entirely and later announced a redesigned successor (Business Ready, “B-READY”).
Where the Index Was Used
During its life, the ranking was used for:
- Government reform programs (dozens of countries set explicit rank targets)
- Investment climate assessments
- Academic research on regulation and growth
- Aid and policy conditionality discussions
Summary
The Doing Business index ranked economies on standardized regulatory friction — and became so consequential that the pressure it created eventually corrupted its own data. Its discontinuation is the strongest lesson in this entire library: a ranking system needs governance as carefully designed as its methodology.
References and Sources
- World Bank. Doing Business methodology archive (official).
- World Bank. Statement on discontinuation of the Doing Business report (2021).
- WilmerHale. Investigation of Data Irregularities in Doing Business 2018 and 2020.
- Wikipedia. Ease of doing business index.