After the implosion of Doing Business rankings, irresponsible and opinionated ‘methodologies’ being mainstreamed by World Bank is hurting the global South; the G20 needs to end this manipulation
Authored by Sanjeev Sanyal and Aakanksha Arora, both of whom work with EAC-PM, Why India Does Poorly on Global Perception Indices brings a critical and fresh approach to such rankings that, sadly, lay bare the subjective and manipulated narratives we have been swallowing whole for decades. Rather than being robust, objective, and methodology-based indices that can withstand the scrutiny of questions and the test of rigour, these rankings are little more than the opinions of a few opaque voices, whose selection process is shrouded in secrecy. Today, it’s easy for anyone to cobble together indices on freedom and democracy—basic facts are available at the click of a mouse. Easier still if they are based on perceptions—opinions and agendas over facts. Even easier, when echo chambers of ideology resonate and dance to their tune. In the process, narrative building turns academia, think tanks and media into accomplices that celebrate the fall of India’s rankings. The intellectual facts-base of narratives thus created, these indices infiltrate the otherwise robust datasets of the World Bank, lend an air of credibility and, through it, impact real actions. These include—but are not restricted to—influencing credit rating decisions (another global institution that needs guidance from India’s capital markets regulator, the Securities and Exchange Board of India (SEBI) that has tightened its regulatory rope on rating agencies); direct investments by large corporations; and indirect investments by institutional investors such as pension funds. On their own, these rankings can be given the place of deserved honour in the dustbins of irrelevance. But once they enter 1818 H Street in Washington DC, they become weapons of (investment) destruction. The Sanyal-Arora paper interrogates three such weaponised indices.
While an impression is created that global rankings and short-listing of countries on parameters from democracy to hunger are based on objective facts and merit, an analytical dissection shows its enfeebled innards and indefensible outputs.
The last time India was downgraded to ‘partially free’ was during the Emergency years (1975-76) and the early liberalisation years (1991-96). The 10 questions on which the India downgrades have happened are hilarious and have turned data masquerading as scholarship into a joke. “Our analysis of the annual reports show that they use some media reports and cherry pick some issues to make the judgements,” the Sanyal-Arora paper states, using sharp numbers to cut the dark underbelly of these rankings. In the urge to splurge narratives, it seems none of the 128 analysts and 50 advisors of Freedom House cared to read these numbers to support their arguments. Perhaps, they use narrativistics, not statistics, to prove a point. But even in the subjective understanding of democracy and freedom, the Freedom House falters and exposes itself. North Cyprus is considered to be a ‘free territory’ and scores higher than India. This is a Turkish-controlled area recognised only by Turkey, and one that has “ethnically cleansed its indigenous Greek population”. Worse, there are recently independent countries that do not have a track record of developed democratic institutions but score higher than India. Timor Leste became independent in 2002, Montenegro in 2006, and both score higher than India. Mongolia’s one-party system ended in 1990 and scores higher than India.
The 10 questions on which the India downgrades have happened are hilarious and have turned data masquerading as scholarship into a joke.
The EIU report makes no attempt to hide its ideological and political glee: “In India, year-long protests by farmers eventually forced the government to repeal the farm laws that it had introduced in 2020. The victory of the protesters, as well as some election defeats for the ruling Bharatiya Janata Party, showed that there are mechanisms and institutions in place to allow government accountability to the electorate between national elections.” India is ranked 46th. But what’s the peer comparison? Malaysia, that has had a continuing political crisis since 2019, stands at 39. Under ‘political culture’, India’s score is 5.0, less than Lesotho that faced a military coup in 2014 and emergencies declared in 2020 and 2022; Sri Lanka and Hong Kong that have faced and are facing political turmoil have higher scores, the Sanyal-Arora paper states. If this is the robustness and the rigour behind EIU’s Democracy Index, executives taking such reports seriously and companies subscribing to its other products of country, risk and industry analyses need to worry about whether they are being manipulated into directing their business decisions based on ideological and subjective considerations. One last question: Why is Mexico geographically situated outside North America—is it to ensure that the colour mix of the continent doesn’t darken?
Malaysia, that has had a continuing political crisis since 2019, stands at 39. Under ‘political culture’, India’s score is 5.0, less than Lesotho that faced a military coup in 2014 and emergencies declared in 2020 and 2022; Sri Lanka and Hong Kong that have faced and are facing political turmoil have higher scores, the Sanyal-Arora paper states.
Predictably, the scores for India have been falling since 2014. Further, India was downgraded to “Electoral Autocracy” in 2021—whatever that means—with the terrorist state Pakistan, failing state Haiti, and the repressive state Iran, as neighbours. This labelling resonates with the Freedom House report, both of whose downgrades coincide with the Emergency years of political repression, suspended elections, and censored press. Apparently, India is an “Autocratiser”. Analysing the V-Dem indices, the Sanyal-Arora paper shows how India has done well on objective parameters but fallen short on opinion-based parameters. India ranks 93, below Lesotho (60), Timor Leste (64), Nepal (71) and Bhutan (65). “This,” the Sanyal-Arora paper says, “is a reflection of the arbitrariness in the way scoring and ranking is done.” The paper also asks an obvious question, a key input to evaluate whether a country is a democracy or not: “Is the head of state democratically elected?” If taken seriously, it would sharply reduce the scores for, and end, the ‘home bias’ narrative of V-Dem for, Sweden, Norway, UK, Denmark, Belgium, and Netherlands, all of which are constitutional monarchies. “Not only is such a question pertinent to a measure of democracy, it can also be answered objectively.”
The factual includes data on election type, minimum voting age, percentage of population with suffrage and so on. According to V-Dem, the evaluative indicators are collated from “five experts per country-year observation,” such as senior analysts, editors, judges, of which two-thirds are nationals of and/or residents in the country.
Further, in a free world, people are free to build castles of self-importance on fundamentals of intellectual drains. The problem comes when such indices are powered by ideological funding and lobbying to influence corporate and institutional money decisions. That too is acceptable: If you have a view, and the money to push it, go ahead. But what is not acceptable is the legitimacy given by multilateral institutions such as the World Bank to such ideologues. Already reeling under the onslaught of wilful manipulation by its executives at the behest of China in its now discarded Doing Business rankings and reports, if this continues, it is only a matter of time that the World Bank itself loses its credibility. By legitimising such ideological fluff into its World Governance Indicators produced by Daniel Kaufmann of Brookings Institution and Aart Kraay of the World Bank, which, according to Sanyal-Arora calculations, inform the credit rating agencies to the extent of 18-20 percent, the institution is looking at another looking at another humiliation ahead. There are two ways to end this series of abominations masquerading as intellectual inputs. First, voluntary: The World Bank introspects and puts an end to such subjective rankings in its World Governance Indicators or any other indicators that have not yet been put under scrutiny but will. It needs to reform and make objective the way it sources inputs for its reports that impact financial flows to and from the global South. And second, coercive: Prime Minister Narendra Modi pushes the G20 under the India Presidency to bring intellectual- and facts-based order into this ideological and bias-laden chaos.
The World Bank introspects and puts an end to such subjective rankings in its World Governance Indicators or any other indicators that have not yet been put under scrutiny but will.
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Gautam Chikermane is a Vice President at ORF. His areas of research are economics, politics and foreign policy. A Jefferson Fellow (Fall 2001) at the East-West ...Read More +