The Doing Business Indicators: Measurement issues and political implications

or in other countries with associated Reproduction Rights Organizations, may make photocopies in accordance with the licences issued to them for this purpose. International Labour Office labour flexibility / employment security / labour law / measurement / methodology / role of World Bank / developed countries / developing countries 13.01.2 The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. Catalogues or lists of new publications are available free of charge from the above address, or by Preface This paper addresses conceptual and methodological issues as well as the policy implications of the 'employing workers' component of the World Bank's Doing Business Indicators. In 2004, the IFC began publishing the Doing Business Report which ranks 175 countries on the 'ease of doing business' a composite index of ten different regulatory areas, including labour market regulation. The index of labour market regulation is known as the " Employing Workers Index. " It assess the amount of flexibility that exists in national labour legislation on issues concerning use of term contracts, minimum wages, dismissal protection, severance pay, working hours, annual leave and non-wage labour costs. Countries that have less protective legislation score better on the index. The index is controversial because by ranking countries on the flexibility of their labour legislation it possibly encourages labour market deregulation, particularly if the index is used as a guide for determining loans by the international financial institutions. This paper is a critical review of the 'employing workers' indicator and its policy implication that no regulation is best …