The World Bank's Doing Business Report: A last fling for the Washington Consensus?

Abstract

The Washington Consensus policies of privatisation and deregulation promoted by the international financial institutions (IFIs) became increasingly controversial during the 1990s, and in 2004 the World Bank's president declared the consensus to be ‘dead’. However, a new push for across-the-board deregulation, notably in the area of workers’ protection, started in 2003 through an annual World Bank publication, Doing Business, which proclaimed a wide range of labour regulations to be nothing more than a hindrance to investment. The IFIs used it to pressure dozens of developing countries to do away with workers’ protection rules, contending that deregulation was necessary to stimulate employment growth, even though the Bank's own internal evaluators were unable to corroborate the claimed link between the Doing Business labour indicator and positive economic outcomes. Faced with mounting pressure from unions, the ILO and elected officials, the Bank finally instructed its staff in 2009 to stop using the indicator and removed it as a conditionality criterion, declaring that the global economic crisis justified adopting a different policy approach.