Tuesday, January 16, 2018

Chile's Capitalist Ranking

There are a variety of indices out there purporting to show how amenable a given country is to capitalism. These are infected with all sorts of biases and political motivations. The news about the World Bank and Chile is just confirmation.

The bank’s chief economist Paul Romer told the Wall Street Journal Friday that Chile’s recent slide in the “Doing Business” index was almost entirely due to methodological changes that could have been politically motivated, and not by deterioration in the country’s business environment. Romer released figures Monday that showed what would have happened to Chile’s ranking without the changes.

This is sensitive in Chile, where Michelle Bachelet's second term was littered with accusations that was practically a communist and the markets breathed a sigh of relief when the right won the presidency again. Political opponents use such rankings to confirm their suspicions of leftist subversion.

We shouldn't need a reminder but perhaps we do: the World Bank is not just an apolitical technocratic organization. Its founding was fundamentally political, as is its functioning. And bias floats all throughout politics.


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