Why the World Bank’s “mistake” deserves an African response

Many pan-African observers and analysts have viewed euro-centric and developed-world metrics of measuring various aspects of social and economic life with a healthy dose of skepticism. For instance, the global food security index, the corruption perceptions index, the democracy index and the competitiveness index are examples of  widely accepted qualitative measurements of social and economic life that essentially reflect the levels of development of nation states around the world. Institutions that proffer these measures – such as the World Bank, Transparency International and the Economist Intelligence Unit – are well respected and deemed to be scientifically objective in their methods and approaches.

The indices outlined above are critical in that they serve as a guide to policy makers and investors in making important social and economic decisions. However, a section of analysts has questioned the objectivity of these indices, including the weights placed on specific measures that are used to derive them. As with any science, the debate leans towards measurement errors, a lack of data and the due diligence involved in ensuring that the index-generating processes can be repeated by others to arrive at the same conclusion. Beyond the differences in scientific views, there are the political schisms that often lead to sharp divisions in economic opinion. Some scientists argue that the indices generated by these reputable international institutions should not be readily accepted because they make for a patently distorted picture of the developing world. Others go as far as claiming the existence of deliberate bias against developing countries – a conspiracy theory which argues that institutions measuring indices of social and economic development are western agents which possess an imperialist agenda that is meant to paint a negative picture of Africa and the developing nations.

As far-fetched as that conspiracy sounds, it was proven true in an article by Josh Zumbrun and Ian Talley in the Wall Street Journal (WSJ). In a rare public admission, the chief economist of the World Bank, Paul Romer, reportedly admitted that the World Bank unfairly influenced its competitiveness index. The World Bank is alleged to have done this by constantly changing its methodology over several years in ways it now admits, were unfair and misleading particularly to developing countries. The changes in the methodology negatively impacted the standing of countries like Chile, whose ranking plummeted after changes were imputed into the index. There is now a call for the World Bank to rectify its mistakes in previous competitiveness rankings going back as far as 2014. This ought to happen not just for Chile alone, but for every other country that is part of the list of the competitiveness rankings.

In light of these revelations, the integrity of the World Bank has been brought into serious question. To the keen observers, this problem goes far beyond the corridors of the World Bank – it fulfills an age-long fear and suspicion that western-dominated and western-funded institutions are broadly tainted by political motivations biased against Africa and the developing world. In the aftermath of such revelations, the integrity of other like-institutions that publish any kind of quality-based index of social and economic interest should be subjected to intense scrutiny. Many analysts who criticized these indices will feel vindicated by Paul Romer’s disclosure of World Bank practices, and will further argue for the establishment of comparable pan-African institutions that can generate their own indices as a way of mitigating the risks of what has long been viewed as a systemic distortion of euro-centric measurements that are applied to Africa’s development.

What has happened here is not trivial. It will surely shake not only the foundations of the  World Bank, but the practice and approaches of institutions that for long, have existed without the need to respond to criticism. Should Africa begin its own effort of measuring its own competitiveness index, food security index, democracy index, and possibly, credit ratings? Or should the World Bank and other like-institutions undergo a catharsis in which they actively integrate many of the previous criticisms and concerns that would otherwise have been ignored in the past? Whatever happens, I am certain that countries like Chile who were adversely affected by the World Bank’s errors will be at the forefront of demanding change. Africa should seize this opportunity and demand more accountability and transparency, as well as the inclusion of specific metrics that can help to provide a balanced picture of the continent’s competitiveness, food security, and democracy.