Russia Goes Up on WB’s Doing Business Rankings


In the overall scheme of things, the World Bank’s Ease of Doing Business (and other such indices) don’t seem to be terribly important. As long as you don’t go full retard on such matters and adopt Soviet-style central planning, or something like that, then you should do just fine as long as your human capital/national IQ is up to scratch. Just compare Chile and China: The former radically liberalized under the late Pinochet; the latter still exercises capital controls, with layers of bureaucracy and prevalent state ownership. But China, with human capital indicators approximately one standard deviation higher than Chile’s, has been growing at 10% for more than three decades, while Chile remains in the middle-income trap.

That said, there are good reasons for paying attention to them too.

First, elites pay a lot of attention to it. Several countries – including Russia, Kazakhstan, and India – have made climbing up the Doing Business rankings a matter of national economic planning.

Second, all else equal, more economic freedom really is “better” than less economic freedom. You do not need to be some kind of neoliberal hypercapitalist to appreciate that having more layers of bureaucracy, more hops you need to jump through to start a business or enforce a contract, as benefitting anyone other than the bureaucrats who create these rules in the first place. Indeed, when adjusted for differing GDP per capita levels, there is a strong correlation between a country’s place on the Doing Business rankings and its reported incidences of bribery/corruption, presumably because the more regulations you have the more opportunities bureaucrats have to shake businesses down.

Finally, one presumes that “kleptocracies” – i.e., what the Putin regime is frequently characterized as by Western officials and the media – will be unwilling to cut down on regulations because it is “built on corruption” and similar rhetoric. But instead we are seeing the precise opposite across multiple objective indicators of corruption, with the Doing Business rankings being just a case in point.


First off, here is Russia’s percentile performance on the Ease of Doing Business rankings since the World Bank began doing them. (Each report refers to the year beforehand, so the most recent report, Doing Business 2016, refers to the situation as of this year). Relative to other countries – and in general, the world has been improving fast this past decade in this respect – Russia went down under the second Putin administration. The Medvedev administration, for all its reformist rhetoric, made no appreciable gains. Only under the current administration has Russia surged ahead to 51st place this year, ahead of the vast majority of non-OECD nations. (Though ironically, at the same time, its growth rate has plummeted, which just goes to further show that in the large scheme of things, institutions aren’t that big of a deal).

A more useful way of looking at this, which also enables both cross-country and temporal comparisons, is to look at the Distance to Frontier index – i.e., how far any particular country lags from the “optimal” level of ease of doing business at any particular year.

Russia and the Ex-USSR


Thoughout the ex-USSR, business conditions have improved significantly in the past few years, to the extent that Russia, Kazakhstan, and – yes – Belarus as now close to the level of the much-lauded Baltics in the late 2000s. Contrary to Maidanist rhetoric, it also seems that Ukraine under Yanukovych made big leaps forwards, only for progress to come to a grinding halt under the pro-European and “reformist” Maidan regime. Let it sink in that it is and long has been much easier to do business in “statist” Belarus under Europe’s “last dictator” than it has been in the pro-Western failed state of Ukraine.

Russia and BRICS


From being middling amongst the BRICS, Russia has surged to the forefront. Note that Russia’s low position on the Ease of Doing Business index has at times been given as a reason to kick it out of BRICS (no matter that Brazil and India always did worse).

Russia and East-Central Europe


From lagging the Visegrad bloc of countries a few years back, Russia has more or less merged into them.

Russia and the West


And has even merged with some Western countries – primarily the more traditionally more corrupt ones along the Eastern Med such as Italy, Greece, and Israel – but still. Point is – no longer is Russia an outlier in terms of ease of doing business even relative to the fully developed world.

Not surprisingly, many people are not very happy about these developments. Bloomberg’s Leonid Bershidsky, normally one of the better anti-Putin journalists:

For some governments, improving their country’s standing in the World Bank’s Doing Business survey has become a national priority. Yet the results of such efforts sometimes are deceptive.

That’s because the annual ranking of business friendliness of regulatory systems isn’t based on surveys of businesses. Instead, it analyzes regulations and regulatory change, and awards points for pro-business measures and takes them away for anti-business ones. In practice, that means rating government policies without considering their real effect. It’s a ranking of institutional good intentions, which explains why so many politicians swear by it.

The fact that it is not based on surveys of perceptions picked by mysterious methods and accountable to nobody is its very point and what makes it objective in the first place! (And I’m not just saying this now that Russia is performing quite well on it. I was saying the same thing in 2008 back when Russia’s position on the Doing Business rankings was nothing to write home about).

Unlike, say,  Transparency International’s Corruption Perceptions Index, which is what Bershidsky from the sounds of it basically wants to copy in relation to Doing Business:

As I explained in previous posts on this blog, it suffers from numerous flaws. Part of it has to do with its questionable methodology: using changing mixes of different surveys to gauge a fluid, opaque-by-definition social phenomenon. Another is its reliance on its appeal to authority, the theory being that “experts” in business and think-tanks know more about corruption relative to anyone else. Countries with more regulations are systematically prejudged, as are those facing hostile media environments such as Russia or Venezuela. Above all, the CPI doesn’t pass the face validity test – in other words, many of its results are frankly ludicrous. Is it truly plausible that Russia (2.1) is as corrupt as failed states like Zimbabwe (2.4) or D.R. Congo (2.0), or that Italy (3.9) is more corrupt than Saudi Arabia (4.7) which is a feudalistic monarchy!?

Bershidsky continues:

… Russia jumped in the charts thanks to four innovations: It cut the number of days required for a new company to open a bank account and register property, cut property taxes and simplified the process of obtaining an electricity connection.

These hardly seem substantial improvements, compared with the danger of losing property to powerful and thoroughly corrupt law enforcement agencies and bureaucrats, the risks imposed by Putin’s external aggression, and the country’s shrinking economy and decayed infrastructure. It’s not for nothing that Russia is 143rd out of 152 nations in the Heritage Foundation’s latest Index of Economic Freedom.

Bershidsky translated: It’s showing the wrong results shut it down let me and Anders Aslund compile it instead.

More general theme: Whenever Russia’s scores on such indices begin to unfathomly climb a bit too high for comfort, there are inevitably calls for them to be erased and replaced with other indices.

This is a familiar phenomenon. For instance, when Transparency International’s Global Corruption Barometer 2013 appeared to indicate that incidences of bribery had recently plummeted in Russia to levels resembling those of the more corrupt First World nations (as opposed to typical levels of other middle-income countries) they opted to not release them at all due to not having “confidence in the reliability of the data.”

UPDATE: Alexander Mercouris has produced an article on the Doing Business rankings that basically confirms the points made here but with more in the way of personal experience.

If Russia’s rapid rise in the World Bank’s ease of doing business rankings tells us that – for all its problems – Russia cannot be the corrupt kleptocratic oligarchy of Western fantasy, it also tells us two other things.

The first is – as I said at the beginning of this article – that the demand for more and more “reforms” simply ignores the fact that reforms are in fact being carried out.

Anyone who reads through the World Bank’s annual surveys will see that they are all about “reforms”. It is precisely because Russia is carrying out “reforms” that its ranking is rising so fast.

To be clear, modernising the court system, introducing a new bankruptcy law, simplifying procedures for connecting to the electricity supply, and passing laws on registering property and on administering bankruptcy, are reforms.

They may lack the drama of breaking up Gazprom, but academic research, historical experience and the World Bank all say the same thing: it is these sort of unexciting reforms that in the end are the ones that make a difference and which produce results.

In other words Russia is reforming, and it is doing so successfully, in a methodical and purposeful way.

The second point is that if one looks at what sort of countries now outrank Russia in the survey, it turns out that they are – broadly speaking – the three Asian industrial giants: Japan, Taiwan and South Korea, the two Asian city states of Hong Kong and Singapore, and the traditional and well established industrialised societies of the West: the US, the three rich countries of the British commonwealth (Canada, Australia and New Zealand) and most (though not all) the states of the EU – in sum what was once called “the first world”.

If one removes the one indicator where Russia scores especially badly, Trading Across Borders – for which there are special reasons (see above) – Russia becomes even more clearly aligned with these “first world” countries rather than with those countries that make up what used to be called “the third world”.

The Russian government’s target is to achieve 20th place in the World Bank’s ease of doing business survey by 2018. That may be too optimistic, though it is worth pointing out that the target for this year was 50th, which Russia only missed by one place.

Anatoly Karlin is a transhumanist interested in psychometrics, life extension, UBI, crypto/network states, X risks, and ushering in the Biosingularity.


Inventor of Idiot’s Limbo, the Katechon Hypothesis, and Elite Human Capital.


Apart from writing booksreviewstravel writing, and sundry blogging, I Tweet at @powerfultakes and run a Substack newsletter.


  1. “while Chile remains in the middle-income trap.”

    -Come on! Chile and the Dominican Republic were the fastest-growing Latin countries from 1973 to 2013, the first due to reforms and the second due to changes in comparative advantage. I’d say that’s decent.

    By far the country most showing the failure of the Doing Business rankings to change much in themselves is Georgia: it did a lot of Doing Business reforms in the mid-2000s, and its economy slowed, falling behind China, when, before, it was growing nearly as fast and at nearly the same level.

  2. Why do you, of all people, spell his name as Yanukovych and not Yanukovich?

    AK: Because I’m not a svidomy who obsesses daily over Kiev/Kyiv. 😉

  3. Where is the productive capacity? Martin van Creveld noted that no goods made in Russia are sold outside Russia.

  4. Lion of Zion says

    Russia is the second biggest arms dealer in the world and probably up there on aerospace equipment as well? I know most US Medium to Heavy Rockets won’t fly without Russian Engines or the licenses behind them. And probably one of the biggest exporters of Nuclear Equipment, I suspect. I wouldn’t be surprised if Russia was pretty close to France and the US in that respect.

  5. Yota is a Russian smartphone company that sells dual screen android phone worldwide. Russia has a strong software industry. A very popular Metro videogame franchise is from Russia. A popular android game, Cut the Rope is also made in Russia. You may have heard of Kapersky, software security company, is a Russian product.

  6. Astuteobservor II says

    “This is a familiar phenomenon. For instance, when Transparency International’s Global Corruption Barometer 2013 appeared to indicate that incidences of bribery had recently plummeted in Russia to levels resembling those of the more corrupt First World nations (as opposed to typical levels of other middle-income countries) they opted to not release them at all due to not having “confidence in the reliability of the data.”

    so pretty much everything that comes out of the west = propaganda? well shit.

    in a way, I kinda understand why china block out western news now. why subject your own population to propaganda if you can help it.

  7. Russia certainly has problems, decades of the USSR regime did big damage to the economy, nobody can dispute that. However I have come across a fair share of online neocons (cuckservatives) that claim that Russia is Nigeria with nukes.

    The people that make these claims seem to be unaware that Russia sent the first man in space, built nuclear weapons, produced famous literature like Dostoyevsky and has had chess world champions – unlike Nigeria. People that make such claims tend to be completed deracinated (or perhaps too afraid to admit race publicly), they never seem to notice that white countries can produce things that non white (excluding East Asians) countries don’t seem able to. Another notable example of this is North Korea, regardless how oppressive the regime is, the nation still has people that can produce nuclear weapons, no African nation can do this, regardless how much patronising fawning they get from the Davos crowd.

    In some ways the destructive habits of the USSR protected Russia from the racial equality and money uber alles that is now destroying the West. If Russia can outlast the West, and the browning it will succumb to, is another question. I am no expert on this but I have seen stories of the ever growing influx from Central Asian and the Caucases into Russia, for those that know Russia well, how big or not is this phenomena ?

  8. Romania is easier to do business in than Hungary? Are they serious or are the WB people infected with refugeeitis?

  9. Just saying, the Metro games we made in Ukraine, at 4A games. . They are just set in Moscow. The writer of the Metro books is Russian, though.

    Russians do have a lot of companies in videogaming. One of the recent breakouts is, with the famous multiplayer military simulator World of Tanks

  10. Stubborn in Germany says

    That’s good news, a prospering Russia is, on balance, better for the rest of Europe than a deteriorating Russia.

    Isn’t it way past time that the leaders of Russia and Europe sat down and hammered out a compromise agreement on Ukraine that ends war; restores sovereignty over Ukraine including Donetsk and Lugansk to the Kiev government (but not Crimea, of course); cements Ukrainian exclusion from NATO; and revives Russia-Europe trade. The U.S. can be notified of the results later.

  11. svidomy?

  12. silviosilver says

    AK seems a bit too eager to squeeze everything into a HBD interpretation. Firstly, it’s not as if Chile’s economic growth has stalled out, which is surely a logical requirement if one is to characterize an economy as being caught in a ‘trap.’ Secondly, Chile is considerably more developed than China. Let’s see what rate China is growing at by the time it reaches Chilean development levels.

  13. Another notable example of this is North Korea, regardless how oppressive the regime is, the nation still has people that can produce nuclear weapons.

    The Korean reactor was based on the Magnox plans, which the British government declassified.

    There is less civil society and more family orientation in Russia Gerd Gigenrenzer recalled that in the 80s he found Russians were appalled that Westerners put their elderly parents in nursing homes. They are Saudi Arabia with an arms industry, and selling missiles to Iran. They have capable people but the society cannot produce consumer goods that anyone outside Russia will buy. The long term future looks bleak, and capital is leaving. Britain and Russia both have arms industries that are important because of their lack of general productive capacity.

  14. [Chile is considerably more developed than China]

    Is it, though? China is slightly ahead per capita in energy consumption, electricity consumption and motor vehicle sales, all good criteria for economic development.

  15. Anatoly is right- everything is WONDERFUL in Russia, and anyone who denies that is a damn Joo neocon.

    Everyone who’s smart is moving to Russia right now, because Putin is a man who knows how to run things. And if you don’t believe it, just ask him.

    All those educated Russians hastening to get out are just opening up good jobs for us! PaT Buchanan says so!

  16. All this is really a sign of China’s specialization in more energy-intensive businesses, though, and the per-capita motor vehicle sales is simply a sign of economic growth-Chile’s had a lot more time to buy more cars!

  17. So you have nothing substantive to say?

  18. Anatoly Karlin says
  19. No, countries don’t stop using energy as they get wealthy, nor renewing their vehicle fleets. You have to peruse the worldwide rankings first, then once you conclude they are a good touchstone, draw your conclusions concerning the individual case.

  20. that Italy (3.9) is more corrupt than Saudi Arabia (4.7) which is a feudalistic monarchy!?

    Mr. Karlin, why is this that hard to believe? Especially when you can say this:

    Let it sink in that it is and long has been much easier to do business in “statist” Belarus under Europe’s “last dictator” than it has been in the pro-Western failed state of Ukraine.

    Singapore is an authoritarian state (but a highly benevolent, humane and efficient one), but it is much less corrupt and easier for business than many “liberal democracies.”

    I would not live in one, but feudal monarchies do have certain advantages (e.g. the rulers, rather like the American WASPs of old, tend to care about the long-term health of their patrimony; they can also enforce stability and, more practically, contracts, etc.). Meanwhile Italy might be a liberal democracy, but the southern part of it (Naples, Sicily, etc.) is a chaotic mafia state with enormous entrenched corruption, gangs, and even pervasive petty crime.

    By the way, this is OT, but what is the significance of the photograph on the right panel of the blog of you shooting a revolver (looks like a Ruger GP100 or a Super Redhawk)?

  21. I don’t know what people mean by “feudal” nowadays, but absolute monarchies have not been and are not all of one kind. Some have all sorts of positive qualities. Others are … well, like Saudi Arabia.

  22. You are now following me around every thread I comment and leaving drive-by-replies like a jilted girlfriend.

    Do you have a specific point of substance here?

    Saudi Arabia is a HIGHLY flawed country to say the least, but it is not outside the realm of possibility or even likelihood that it is slightly less corrupt than Italy. Southern Italy is a mess of corruption, gang-warfare, petty street crime. That doesn’t mean Italy is, overall, a worse country than Saudi Arabia (I’d obviously rather live in Italy than in KSA in a heart beat), but we are specifically discussing the issue of corruption here.

  23. Evidently you find it difficult to eke out banality with anything beyond braggadocio or butthurt.

  24. It is remarkable how all member states of the Eurasian Economic Union are doing well in this ranking.

  25. If you have to resort to listing a mobile app as an example of an export of one of the world’s largest economies, that’s kind of evidence that that country doesn’t export much, especially since said app isn’t that profitable. It’s not Clash of Clans.

  26. Very much so, although I’d rather take my chances in a Shanghai hospital than a rural Chilean one.