Teaching to the test
By Scott Sumner
This graph in The Economist caught my eye:
The graph shows big jumps for several countries in the World Bank’s “Ease of Doing Business” rankings. This seems like good news.
On second thought, rankings are a zero sum game, so maybe it’s not good news.
On third thought, more than 1/3 of humans live in India and China, so perhaps it is good news after all.
On fourth thought, it appears these countries were gaming the system, at least to some extent:
How did they do it? And how credible is their progress? In an ideal world, countries would rise in the World Bank ranking as a welcome by-product of reforms undertaken for their own sake. But India and China are among the 60-plus countries that have government units dedicated to moving upwards, almost as if it were an end in itself.
China’s comprises about 40 people; India’s perhaps 200, plus others working on state-level scorecards. Many teams visit the bank to learn precisely how the scores are calculated. India’s now thinks it could mark its own exam. It announced, long before the bank’s official assessment, the score it felt it “should” receive.
On fifth thought (and I promise this is my last word on the subject), maybe it is good news. While teaching to the test is far from the optimal approach to education, surely it leads to at least some useful learning. Similarly, while trying to do reforms that move a country up the World Bank ranking is far from the optimal approach, it’s likely that these efforts yield at least some useful reductions in red tape:
The rankings also loom large in Russia. Vladimir Putin, its president, set an ambitious target to rise by 100 places in six years. That proved impossible. Russia has instead risen by 89 places in seven years. This steady progress says a lot about the ingenuity of its reform unit. It says less about Russia’s actual friendliness to business. Compare, for example, its positions in the Doing Business report (31st) and the corruption index produced by Transparency International, an ngo(135th).
Russia’s manoeuvres may, however, have motivated more genuine reforms elsewhere. Mr Putin’s target possibly helped inspire Mr Modi in 2014 to set one of his own: to move India into the top 50 countries by 2019. India’s rapid progress on this front seems in turn to have galvanised China’s efforts.
Progressives often talk of a “race to the bottom” on corporate tax reform. I don’t agree. But surely we can all agree that a “race for the top” on reducing red tape is a useful form of international competition.
PS. David Beckworth has a new podcast where he interviews me on monetary policy. It was recorded at the University of Texas a few weeks ago.