Background
This page discusses how MCC is collecting and using additional supplemental information this year for three indicators on MCC’s country scorecards: Access to Credit, Business Start-Up, and Land Rights and Access. The scorecard is a key tool used in MCC’s annual country selection process. More information on this process is available at the Who We Fund portion of the MCC website.Why is MCC focusing on supplemental information for these indicators?
On August 27, 2020, the World Bank announced that it would pause publication of its annual Doing Business report after discovering irregularities in previously reported Doing Business data. The World Bank also announced that it would launch a systematic review of these irregularities and conduct an independent internal audit of the data collection process and the controls to safeguard data integrity. While initial reports suggest the irregularities center on countries that do not receive MCC scorecards because they do not meet MCC’s income criteria, MCC is taking additional steps to ensure comprehensive information is available to the Board regarding these issues for the countries the Board considers that are within MCC’s candidate pool.How is MCC handling the situation?
Due to the pause in data production, MCC is using data from the 2020 Doing Business report, released in October 2019, for the Access to Credit, Business Start-Up, and Land Rights and Access indicators on the Fiscal Year 2021 MCC country scorecards.As a matter of practice during the country selection process each year, MCC seeks information from supplemental sources to help its Board of Directors understand nuance or broader factors that may not be captured by the scorecards. In light of the World Bank’s announcement, MCC is taking additional steps to provide the Board with supplemental information on country performance on the areas measured by the affected scorecard indicators.
In particular, MCC is providing relevant information on country performance in similar areas to the Doing Business indicators used on the MCC scorecard by consulting: data on property rights, credit market regulations, and business regulations from the Cato/Fraser Institute’s Economic Freedom of the World report and index; data on barriers to financing, regulatory barriers, and the days to receive an operating license from the World Bank’s Enterprise Surveys; data on costs and documentation barriers to account access from the Global Findex Database; and data on perceptions of whether the government will seize private land rights from Prindex.
Information from these sources is being used to provide the Board a full and comprehensive picture of Access to Credit, Business Start-Up, and Land Rights and Access indicators for MCC candidate countries.