The Doing Business Indicators in Investor Protection: The Case of Singapore

Abstract

The World Bank’s Ease of Doing Business index has significantly impacted regulations and policies regarding corporate matters around the world, and yet there has been scant academic attempt examining the use and implication of the Doing Business indicators, especially in the area of investor protection, an essential element in doing business. In this paper, we examine in depth the research methodologies employed by the Doing Business project in measuring the strength of investor protection, especially in light of the recent renaming of the index to Protecting Minority Investors index in Doing Business 2015. Using Singapore as a case study, we argue that, notwithstanding the positive changes brought in the latest round of changes, the variables and components chosen in the index essentially fail to capture salient features of minority protection. We argue that minority protection is an area which is inherently too context-specific to be evaluated based on a unified business assumption or by pure quantitative methods. Lastly, we also provide specific suggestions for improvements of the Protecting Minority Investors index.