Organization
World Bank
Report Year
2014
1st MAR Year
2016
Accepted
Yes
Status
Active
Recommendation

Expand the coverage of current diagnostic tools and integrate them to produce comparable indicators so that these can capture the areas of the business environment not yet covered by existing tools.

Recommenation Adoption
IEG Level of Adoption by Year: mar-rating-popup MNTNTNT Management Adoption by Year: mar-rating-mng-popup SNTNTNT
CComplete
HHigh
SSubstantial
MModerate
NNegligible
NANot Accepted
NRNot Rated
Findings Conclusions

Over the years a number of diagnostic tools have been used to design investment climate interventions. Recently new tools have been developed for specific areas of the regulatory environment. Although these tools cover in detail individual areas of the regulatory environment, there is no comprehensive tool that allows an assessment of all regulatory aspects in client countries. Such a tool would help determine which area is the most problematic in client countries.
IEG presented evidence that the Doing Business indicators and Enterprise Survey datathe most commonly used diagnostic toolsare incomplete; that is, they do not cover all areas of regulation as identified in the best practice list (Table 1.3). Doing Business and Enterprise Surveys cover only some aspectssuch as business registration, taxation, and tradewhere most of the World Bank Group activities take place.

Original Management Response

WB: Agree. Management agrees that diagnostic tools and indicators should evolve over time in the light of operational experience, evolving priorities, and advances in the academic literature. Management is undertaking multiple initiatives to develop new, and refine existing, diagnostic tools.
Management plans to review how indicators and other benchmarking tools are being utilized by the World Bank Group to inform investment climate activities, with a view to expand the utilization of indicators as an engagement tool. Management also notes the move of Global Indicators and Analysis Group, responsible for the Enterprise Surveys and Doing Business indicators, to the Development Economics Vice Presidency in October 2013 as part of the efforts to further revamp and expand the menu of investment climate indicators available to World Bank Group staff.

Action Plans
Action 1
Action 1 Number:
0355-01
Action 1 Title:
Action 1.A: Jointly with DEC, identify gaps in the current set of indicators and opportunities to fill these gaps through an exp
Action 1 Plan:

Action 1.A: Jointly with DEC, identify gaps in the current set of indicators and opportunities to fill these gaps through an expansion or refinement of existing indicators.
Indicator: Development of a strategy towards filling gaps in the current set of indicators jointly with DEC, including related technical engagement and fundraising.
Baseline: Gaps to be identified in first half of FY16.
Target: Improved coverage of the investment climate space through appropriate indicators.
Timeline: Strategy developed by end of FY16; implementation of expansion or refinement completed by end of FY18

Action 2
Action 3
Action 4
Action 5
Action 6
Action 7
Action 8
2019
IEG Update:
No Updates
Management Update:
No Updates
2018
IEG Update:
No Updates
Management Update:
No Updates
2017
IEG Update:
No Updates
Management Update:
No Updates
2016
IEG Update:

The first recommendation aims at developing a set of comparable indicators of the business environment, complete and integrated, so that the WBG can identify the most important constraint in client countries. Although some actions have been taken towards achieving such recommendation, these new initiatives are mostly directed to M;E activities or to facilitate access to indicators from existing sources - e.g. indicators from the Global Competitiveness Report (World Economic Forum) and the World Investment and Political Risk (MIGA). Consequently these indicators are not comparable to the main sources of data - e.g. Doing Business and Enterprise Surveys. In other words, using these new indicators will not allow the WBG to identify priority areas because the new indicators do not use the same metric. It is not clear from the update whether a strategy has been developed to improve the WBG support to investment climate through appropriate indicators, as previously planned.

Management Update:

The Investment Climate team has been working on multiple fronts in FY16 to continue to identify and fill data and diagnostic gaps. FY16 achievements include:
Launch of a new Investment Climate Snapshot portal providing curated cross-country investment climate indicators to facilitate broader use of such data for diagnostics and operations. (http://wbmsfpd08:50829/)
Development of new indicators for investment climate results measurement and evaluation, e.g. investment generated.(http://globalpractices.worldbank.org/trade/Pages/SitePages/ME_IC.aspx)
Undertaking of a systematic review of gaps in the coverage of investment climate data and indicators. (http://globalpractices.worldbank.org/trade/Knowledge Base/Forms/AllItems.aspx?RootFolder=%2Ftrade%2FKnowledge%20Base%2FIC%2FIndicator%5FBased%5FReform%2FIC%20Diagnostics;FolderCTID=0x01200088244B94A062384FBA76C44F79ABE71C;View=%7BB0E5A2B2%2DD8CA%2D41B0%2DA276%2DA8F1190D598C%7D)
Continuation of a close collaboration with DECIG in leveraging new data in research, analytical work, and operations. For example, the new DECIG dataset on Global Indicators in Regulatory Governance is underpinning new investment climate work in several workstreams of the Good Regulatory Practice program. (http://rulemaking.worldbank.org/)
In FY17, these efforts will be deepened and broadened through the launch of a new Global Investment Competitiveness survey, development of an integrated Investment Climate Diagnostic tool, and targeted policy research and analysis on various investment climate topics.