Professor Romer, the revelation that the World Bank leadership had manipulated data from the “Going Business” report did not come as a surprise to you. Help us remember why?
When I went to the World bank came, I found that the country rankings published in the “Doing Business” report could be easily manipulated. I prohibited changes to the formulas used to calculate the rankings for the 2017 report, so that for the first time in years, at least the annual comparisons of the report were meaningful.
What happened next?
Then withdrew from me Kristalina Georgiewa (then World Bank CEO) all the administrative powers that I had as Senior Vice President. This meant that I could not stop the manipulations that were documented in the current test report for the rankings of the 2018 report. Then, in January 2018, I gave an interview to the Wall Street Journal in which I expressed my concerns about the report. After I left, Simeon Djankov, who carried out the manipulation documented in the test report, also conducted an “alleged” external review of my allegations. It stated that the existence of the type of manipulation that Simeon himself performed was denied.
When you raised concerns about the methodology of the “Doing Business” report that pushed Chile’s rating down, was there anyone at the World Bank who shared your concerns?
I had deposed the former head of the department that had prepared the DB report. I replaced him with a subordinate of integrity who was also concerned. Unfortunately, after I was removed from senior management, I was no longer able to protect them from the pressures documented in this report. The people to whom I reported, Jim Kim and Kristalina Georgieva, said the right things when I was describing the problems, but Ms. Georgieva responded by removing my authority and excluding me from the flow of information and the decision-making process.
Did Kristalina Georgieva show a lack of integrity?
All of Djankov’s manipulations documented in this audit were undertaken on behalf of Ms. Georgieva. His actions and statements directly reflect the character and management style of Ms. Georgiewa. His actions and statements, as well as the actions and statements directly attributable to Ms. Georgieva, provide concrete evidence of dishonesty and intimidation of subordinates.
What did the leadership do to solve the case with Chile?
As already mentioned, Simeon Djankow carried out an “audit” that glossed over the processes. Without denying the facts that I have established, the related concerns have simply been dismissed.
Has this supposed lack of decency from Georgieva and Jim Yong Kim Made you quit the World Bank after just 13 months? What were the real reasons?
I felt obliged to the World Bank as an institution, but I arranged for the exit because I could no longer work for superiors who lacked integrity.
You suspected in public that political motives could have been the reason for the downgrading of Chile? You later withdrew this “statement”. What do you think today? What are the motivations for the manipulation?
To be clear: I have not withdrawn my explanation of the problems. I was trying to sort out exactly what I knew. It was clear that the country rankings could easily be manipulated. It was also clear that the deterioration in the ranking for Chile was primarily the result of changes in the criteria used to determine the ranking, and not a deterioration in Chile’s performance, either in absolute or relative terms. Some reports have suggested that I have “direct evidence” of deliberate tampering. I was trying to make it clear that I don’t have this type of direct evidence.
Were you directly involved with Simeon Djankov when you raised concerns about the DB report? What was his role?
I worked closely with Mr Djankow and met Ms. Georgiewa less often. My claim that Mr Dyankov worked directly on Ms Georgieva’s behalf is based on all of these interactions.
Are other World Bank reports reliable?
The World Bank’s official statistics and publications have many fundamental weaknesses. Research and measurement are always flawed, but what makes the World Bank’s culture so worrying is the lack of the mechanisms commonly used in science to remedy weaknesses and allow advances towards a clearer and more accurate description of the truth. Obvious dishonesty will be tolerated. The type of intimidation the audit documents can be used by people in power to suppress any unwanted clarification of the facts.
Would the “Doing Business” report have been worth preserving?
No. As long as the profound problems with the bank’s management structure are not resolved – as long as dishonesty and intimidation are successful strategies for advancing the management hierarchy – such a World Bank report cannot be trusted.
Does the report contain too much neoliberal ideology? What would you change?
The doing business report had an ideological tinge. But that could have been corrected. The deeper problem is an institutional context that rewards dishonesty and intimidation. Mr Djankov’s actions were not those of an outsider who strayed from the World Bank culture. He was an insider who embodied that culture.