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World Bank Headquarters, 2013, Washington, D.C. (Photo: Simone D. McCourte / World Bank)
World Bank Rankings Promote Deregulation at the Expense of Working People
The highly controversial annual Doing Business report gives governments high marks if they slash taxes and worker protections.
Nov 03, 2019
Through its annual Doing Business rankings, the World Bank promotes blindly deregulatory measures, including a race to the bottom on taxes and fewer protections for workers.
In the recently released 2020 edition, countries get high marks if they demonstrate a commitment to slashing regulations rather than policies that support sustainable development, poverty elimination, and inequality reduction. Both the World Bank and the International Monetary Fund have used the report's indicators to pressure countries to reduce regulations, sometimes through loan conditions.
Doing Business has long been dogged by controversy. In 2018, World Bank chief economist Paul Romer sharply criticized the report, noting that methodological changes -- not reforms -- had led to dramatic swings in Chile's ranking. Romer speculated that staff could have manipulated the rankings for political purposes, an overreach that distracted from his valid criticisms of the methodology. As the Center for Global Development pointed out, Doing Business does not require political manipulation because "the index starts from an extreme ideological premise." The creation of Doing Business in the early 2000s drew inspiration from the right-wing Heritage Foundation's Index of Economic Freedom.
For decades, Chile pursued the neoliberal policies championed by Doing Business and the World Bank. Under dictator Augusto Pinochet, Chile privatized its pension system. The Bank held up Chile as a model and promoted pension privatization across the world, an experiment that ended in failure. In Chile, the pension system is in crisis, wages are low, jobs are insecure, and public services including water are privatized. In recent weeks a mass movement has risen up to demand a new model that benefits everyone.
Nonetheless, supply-side ideology may have gained new life at the World Bank. President David Malpass, selected this year by the Trump administration, described how financial deregulation in Kenya enabled an explosion of short-term microloans via mobile phones. "It's the kind of liberalization process we need to unleash across the developing world," Malpass said. This deregulation gave Kenya a significant boost in its Doing Business score from the "Getting Credit" indicator, where it ranks 4th globally.
While the Bank hypes mobile lending as a tool for entrepreneurship and development, there is a much darker side. Mobile lenders in Kenya aggressively market high-interest loans that trap people in unaffordable debt. These loans are not fueling business or investment either: only 10 percent of mobile borrowers in Kenya used a loan for that purpose. Most borrowers use loans for consumption, medical needs, and school fees.
Bridge Academies, which received funding from the World Bank's private sector lending arm, is among the sources of school fees in Kenya. The World Bank Group is under pressure to divest from Bridge, which has been scrutinized for evading regulations on education standards and providing untrained teachers with poor working conditions.
Under Prime Minister Modi, the Indian government's pursuit of a higher Doing Business ranking has guided policy-making.
In Kenya and around the world, the solution is not predatory finance and private education. People need quality jobs with living wages, a goal that Doing Business undermines. The World Bank suspended the Employing Workers Indicator (originally Hiring and Firing Workers) from the ranking calculations in 2009, after criticism that it degraded labor standards. However, Doing Business continues to gather the data, and the 2020 report devotes a chapter to the subject.
Countries are lauded for "making employment regulation more business-friendly" through flexibility measures including higher caps on overtime hours, reducing extra pay for working at night or on rest days, longer probationary periods before workers become permanent, and expanding the allowability of temporary and fixed-term employment relationships.
Doing Business justifies these flexibility measures in the name of letting workers "choose their jobs and working hours more freely." Workers do need a genuine measure of control over their time and input in scheduling, especially to balance care responsibilities. This can be achieved through negotiations between employers, trade unions, and governments to balance the needs of everyone.
The ILO Global Commission on the Future of Work highlighted the need to address both insecure under-employment and excessive hours. The Commission recommended "the adoption of appropriate regulatory measures that provide workers with a guaranteed and predictable minimum number of hours" and actions to ensure that on-call work is dignified and "the choice for greater flexibility is a real one." They suggest additional pay for work that is not guaranteed and compensation for the waiting time of on-call workers.
The changes promoted by Doing Business give employers even more power, allowing them to threaten non-renewal of employment contracts and keep workers insecure with unpredictable scheduling. Doing Business 2020 states that Serbian "authorities could benefit from the experience of Hungary where employers have the freedom to use fixed-term contracts of up to five years for tasks of a permanent nature." The interest here is only in the "freedom" of business to do whatever it pleases, without considering the effect on working people.
Another justification is that flexibility will improve the ability of women and youth to participate in the workforce. The citation for one such claim is a decade-old study from Simeon Djankov, a central figure in the founding and survival of Doing Business. Evidence from the real world contradicts these claims. In reviewing the effects of labour market flexibility measures in Europe, researchers found "no support for the notion that lowering restrictions on the use of temporary employment relations can help reduce youth unemployment."
The discredited Employing Workers Indicator recently made an appearance in a World Bank white paper on social protection. It is no surprise that the indicator is used in a paper that calls for fewer labor regulations and a social protection system built around individual savings, reduced employer contributions, and narrowly targeted social safety nets. A full analysis of the World Bank's proposals on social protection and labour is available here.
In India, trade unions will hold a nationwide general strike in January 2020 to oppose the policies of Prime Minister Modi, including the reduction of employer contributions to pension funds and social insurance. India has aggressively pursued higher rankings in Doing Business, lobbying the Bank for favourable methodology changes and letting the pursuit of a higher ranking guide policy-making.
"The Government boasts that India's ranking is going up," the Indian unions note. However, "All this is being done at the expense of the working people."
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Leo Baunach
Leo Baunach is the Director of the International Trade Union Confederation and Global Unions Office in Washington, D.C., which advocates for reforming multilateralism and a development model that benefits working people everywhere.
Through its annual Doing Business rankings, the World Bank promotes blindly deregulatory measures, including a race to the bottom on taxes and fewer protections for workers.
In the recently released 2020 edition, countries get high marks if they demonstrate a commitment to slashing regulations rather than policies that support sustainable development, poverty elimination, and inequality reduction. Both the World Bank and the International Monetary Fund have used the report's indicators to pressure countries to reduce regulations, sometimes through loan conditions.
Doing Business has long been dogged by controversy. In 2018, World Bank chief economist Paul Romer sharply criticized the report, noting that methodological changes -- not reforms -- had led to dramatic swings in Chile's ranking. Romer speculated that staff could have manipulated the rankings for political purposes, an overreach that distracted from his valid criticisms of the methodology. As the Center for Global Development pointed out, Doing Business does not require political manipulation because "the index starts from an extreme ideological premise." The creation of Doing Business in the early 2000s drew inspiration from the right-wing Heritage Foundation's Index of Economic Freedom.
For decades, Chile pursued the neoliberal policies championed by Doing Business and the World Bank. Under dictator Augusto Pinochet, Chile privatized its pension system. The Bank held up Chile as a model and promoted pension privatization across the world, an experiment that ended in failure. In Chile, the pension system is in crisis, wages are low, jobs are insecure, and public services including water are privatized. In recent weeks a mass movement has risen up to demand a new model that benefits everyone.
Nonetheless, supply-side ideology may have gained new life at the World Bank. President David Malpass, selected this year by the Trump administration, described how financial deregulation in Kenya enabled an explosion of short-term microloans via mobile phones. "It's the kind of liberalization process we need to unleash across the developing world," Malpass said. This deregulation gave Kenya a significant boost in its Doing Business score from the "Getting Credit" indicator, where it ranks 4th globally.
While the Bank hypes mobile lending as a tool for entrepreneurship and development, there is a much darker side. Mobile lenders in Kenya aggressively market high-interest loans that trap people in unaffordable debt. These loans are not fueling business or investment either: only 10 percent of mobile borrowers in Kenya used a loan for that purpose. Most borrowers use loans for consumption, medical needs, and school fees.
Bridge Academies, which received funding from the World Bank's private sector lending arm, is among the sources of school fees in Kenya. The World Bank Group is under pressure to divest from Bridge, which has been scrutinized for evading regulations on education standards and providing untrained teachers with poor working conditions.
Under Prime Minister Modi, the Indian government's pursuit of a higher Doing Business ranking has guided policy-making.
In Kenya and around the world, the solution is not predatory finance and private education. People need quality jobs with living wages, a goal that Doing Business undermines. The World Bank suspended the Employing Workers Indicator (originally Hiring and Firing Workers) from the ranking calculations in 2009, after criticism that it degraded labor standards. However, Doing Business continues to gather the data, and the 2020 report devotes a chapter to the subject.
Countries are lauded for "making employment regulation more business-friendly" through flexibility measures including higher caps on overtime hours, reducing extra pay for working at night or on rest days, longer probationary periods before workers become permanent, and expanding the allowability of temporary and fixed-term employment relationships.
Doing Business justifies these flexibility measures in the name of letting workers "choose their jobs and working hours more freely." Workers do need a genuine measure of control over their time and input in scheduling, especially to balance care responsibilities. This can be achieved through negotiations between employers, trade unions, and governments to balance the needs of everyone.
The ILO Global Commission on the Future of Work highlighted the need to address both insecure under-employment and excessive hours. The Commission recommended "the adoption of appropriate regulatory measures that provide workers with a guaranteed and predictable minimum number of hours" and actions to ensure that on-call work is dignified and "the choice for greater flexibility is a real one." They suggest additional pay for work that is not guaranteed and compensation for the waiting time of on-call workers.
The changes promoted by Doing Business give employers even more power, allowing them to threaten non-renewal of employment contracts and keep workers insecure with unpredictable scheduling. Doing Business 2020 states that Serbian "authorities could benefit from the experience of Hungary where employers have the freedom to use fixed-term contracts of up to five years for tasks of a permanent nature." The interest here is only in the "freedom" of business to do whatever it pleases, without considering the effect on working people.
Another justification is that flexibility will improve the ability of women and youth to participate in the workforce. The citation for one such claim is a decade-old study from Simeon Djankov, a central figure in the founding and survival of Doing Business. Evidence from the real world contradicts these claims. In reviewing the effects of labour market flexibility measures in Europe, researchers found "no support for the notion that lowering restrictions on the use of temporary employment relations can help reduce youth unemployment."
The discredited Employing Workers Indicator recently made an appearance in a World Bank white paper on social protection. It is no surprise that the indicator is used in a paper that calls for fewer labor regulations and a social protection system built around individual savings, reduced employer contributions, and narrowly targeted social safety nets. A full analysis of the World Bank's proposals on social protection and labour is available here.
In India, trade unions will hold a nationwide general strike in January 2020 to oppose the policies of Prime Minister Modi, including the reduction of employer contributions to pension funds and social insurance. India has aggressively pursued higher rankings in Doing Business, lobbying the Bank for favourable methodology changes and letting the pursuit of a higher ranking guide policy-making.
"The Government boasts that India's ranking is going up," the Indian unions note. However, "All this is being done at the expense of the working people."
Leo Baunach
Leo Baunach is the Director of the International Trade Union Confederation and Global Unions Office in Washington, D.C., which advocates for reforming multilateralism and a development model that benefits working people everywhere.
Through its annual Doing Business rankings, the World Bank promotes blindly deregulatory measures, including a race to the bottom on taxes and fewer protections for workers.
In the recently released 2020 edition, countries get high marks if they demonstrate a commitment to slashing regulations rather than policies that support sustainable development, poverty elimination, and inequality reduction. Both the World Bank and the International Monetary Fund have used the report's indicators to pressure countries to reduce regulations, sometimes through loan conditions.
Doing Business has long been dogged by controversy. In 2018, World Bank chief economist Paul Romer sharply criticized the report, noting that methodological changes -- not reforms -- had led to dramatic swings in Chile's ranking. Romer speculated that staff could have manipulated the rankings for political purposes, an overreach that distracted from his valid criticisms of the methodology. As the Center for Global Development pointed out, Doing Business does not require political manipulation because "the index starts from an extreme ideological premise." The creation of Doing Business in the early 2000s drew inspiration from the right-wing Heritage Foundation's Index of Economic Freedom.
For decades, Chile pursued the neoliberal policies championed by Doing Business and the World Bank. Under dictator Augusto Pinochet, Chile privatized its pension system. The Bank held up Chile as a model and promoted pension privatization across the world, an experiment that ended in failure. In Chile, the pension system is in crisis, wages are low, jobs are insecure, and public services including water are privatized. In recent weeks a mass movement has risen up to demand a new model that benefits everyone.
Nonetheless, supply-side ideology may have gained new life at the World Bank. President David Malpass, selected this year by the Trump administration, described how financial deregulation in Kenya enabled an explosion of short-term microloans via mobile phones. "It's the kind of liberalization process we need to unleash across the developing world," Malpass said. This deregulation gave Kenya a significant boost in its Doing Business score from the "Getting Credit" indicator, where it ranks 4th globally.
While the Bank hypes mobile lending as a tool for entrepreneurship and development, there is a much darker side. Mobile lenders in Kenya aggressively market high-interest loans that trap people in unaffordable debt. These loans are not fueling business or investment either: only 10 percent of mobile borrowers in Kenya used a loan for that purpose. Most borrowers use loans for consumption, medical needs, and school fees.
Bridge Academies, which received funding from the World Bank's private sector lending arm, is among the sources of school fees in Kenya. The World Bank Group is under pressure to divest from Bridge, which has been scrutinized for evading regulations on education standards and providing untrained teachers with poor working conditions.
Under Prime Minister Modi, the Indian government's pursuit of a higher Doing Business ranking has guided policy-making.
In Kenya and around the world, the solution is not predatory finance and private education. People need quality jobs with living wages, a goal that Doing Business undermines. The World Bank suspended the Employing Workers Indicator (originally Hiring and Firing Workers) from the ranking calculations in 2009, after criticism that it degraded labor standards. However, Doing Business continues to gather the data, and the 2020 report devotes a chapter to the subject.
Countries are lauded for "making employment regulation more business-friendly" through flexibility measures including higher caps on overtime hours, reducing extra pay for working at night or on rest days, longer probationary periods before workers become permanent, and expanding the allowability of temporary and fixed-term employment relationships.
Doing Business justifies these flexibility measures in the name of letting workers "choose their jobs and working hours more freely." Workers do need a genuine measure of control over their time and input in scheduling, especially to balance care responsibilities. This can be achieved through negotiations between employers, trade unions, and governments to balance the needs of everyone.
The ILO Global Commission on the Future of Work highlighted the need to address both insecure under-employment and excessive hours. The Commission recommended "the adoption of appropriate regulatory measures that provide workers with a guaranteed and predictable minimum number of hours" and actions to ensure that on-call work is dignified and "the choice for greater flexibility is a real one." They suggest additional pay for work that is not guaranteed and compensation for the waiting time of on-call workers.
The changes promoted by Doing Business give employers even more power, allowing them to threaten non-renewal of employment contracts and keep workers insecure with unpredictable scheduling. Doing Business 2020 states that Serbian "authorities could benefit from the experience of Hungary where employers have the freedom to use fixed-term contracts of up to five years for tasks of a permanent nature." The interest here is only in the "freedom" of business to do whatever it pleases, without considering the effect on working people.
Another justification is that flexibility will improve the ability of women and youth to participate in the workforce. The citation for one such claim is a decade-old study from Simeon Djankov, a central figure in the founding and survival of Doing Business. Evidence from the real world contradicts these claims. In reviewing the effects of labour market flexibility measures in Europe, researchers found "no support for the notion that lowering restrictions on the use of temporary employment relations can help reduce youth unemployment."
The discredited Employing Workers Indicator recently made an appearance in a World Bank white paper on social protection. It is no surprise that the indicator is used in a paper that calls for fewer labor regulations and a social protection system built around individual savings, reduced employer contributions, and narrowly targeted social safety nets. A full analysis of the World Bank's proposals on social protection and labour is available here.
In India, trade unions will hold a nationwide general strike in January 2020 to oppose the policies of Prime Minister Modi, including the reduction of employer contributions to pension funds and social insurance. India has aggressively pursued higher rankings in Doing Business, lobbying the Bank for favourable methodology changes and letting the pursuit of a higher ranking guide policy-making.
"The Government boasts that India's ranking is going up," the Indian unions note. However, "All this is being done at the expense of the working people."
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Omar, Ramirez Among First in Congress to Decry 'Unconstitutional' Trump Strike on Boat
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Congresswomen Ilhan Omar and Delia Ramirez on Thursday strongly condemned the Trump administration's deadly attack on a boat allegedly trafficking cocaine off the coast of Venezuela as "lawless and reckless," while urging the White House to respect lawmakers' "clear constitutional authority on matters of war and peace."
"Congress has not declared war on Venezuela, or Tren de Aragua, and the mere designation of a group as a terrorist organization does not give any president carte blanche," said Omar (D-Minn.), referring to President Donald Trump's day one executive order designating drug cartels including the Venezuela-based group as foreign terrorist organizations.
Trump—who reportedly signed a secret order directing the Pentagon to use military force to combat cartels abroad—said that Tuesday's US strike in international waters killed 11 people. The attack sparked fears of renewed US aggression in a region that has endured well over 100 US interventions over the past 200 years, and against a country that has suffered US meddling since the late 19th century.
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Omar continued:
They're now using the failed War on Drugs to justify their egregious violation of international law. The US posture towards the eradication of drugs has caused immeasurable damage across our hemisphere. It has led to massive forced displacement, environmental devastation, violence, and human rights violations. What it has not done is any damage whatsoever to narcotrafficking or to the cartels. It has been a dramatic, profound failure at every level. In Latin America, even right-wing presidents acknowledge this is true.
The congresswoman's remarks came on the same day that US Secretary of State Marco Rubio designated a pair of Ecuadorean drug gangs as terrorist organizations while visiting the South American nation. This, after Rubio said that US attacks on suspected drug traffickers "will happen again."
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Echoing critics including former Human Rights Watch director Kenneth Roth, who called Tuesday's strike a "summary execution," Ramirez (D-Ill.) said Thursday on social media that "Trump and the Pentagon executed 11 people in the Caribbean, 1,500 miles away from the United States, without a legal rationale."
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Friends of the Everglades, the Center for Biological Diversity, and the Miccosukee Tribe of Indians of Florida sought "to halt the unlawful construction" of the site. Last month, Judge Kathleen Williams—appointed by former President Barack Obama to the U.S. District Court for the Southern District of Florida—ordered the closure of the facility within 60 days.
However, on Thursday, Circuit Judges Elizabeth Branch and Barbara Lagoa blocked Williams' decision, concluding that "the balance of the harms and our consideration of the public interest favor a stay of the preliminary injunction."
Judge Adalberto Jordan, an Obama appointee, issued a brief but scathing dissent. He wrote that the majority "essentially ignores the burden borne by the defendants, pays only lip service to the abuse of discretion standard, engages in its own factfinding, declines to consider the district court's determination on irreparable harm, and performs its own balancing of the equities."
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In a Thursday statement, Florida Immigrant Coalition deputy director Renata Bozzetto said that "the 11th Circuit is allowing atrocities to happen by reversing the injunction that helped to paralyze something that has been functioning as an extrajudicial site in our own state! The Everglades Detention Camp isn't just an environmental threat; it is also a huge human rights crisis."
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Pay for the seven companies' half-dozen top executives increased by a combined $100 million, 42%, on average. This is compared to the $14,000 pay increase that the average employee at these companies received over the same period, which is a much more modest increase of 24%.
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While data is scarce, the rate of denied insurance claims is believed to have risen since the law went into effect.
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The report said that such high rates of denials being overturned raise "questions about whether Medicare Advantage plans are complying with their coverage obligations or just reflexively saying 'no' in the hopes there will be no appeal."
Salespeople for the Cigna-owned company EviCore, which insurers hire to review claims, have even boasted that they help companies reduce their costs by increasing denials by 15%, part of a model that ProPublica has called the "denials for dollars business." Their investigation in 2024 found that insurers have used EviCore to evaluate whether to pay for coverage for over 100 million people.
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