World Bank’s World Development Report 2019: Unsatisfactory policy perspective on changes in the world of work

Responding to the World Bank’s publication of the “World Development Report 2019: The Changing Nature of Work” on Friday, ITUC General Secretary Sharan Burrow expressed disappointment in the Bank’s ‘flagship’ report: “The WDR 2019 seems more intent on delivering a few highly questionable and simplistic policy messages about the need to deregulate business and alleviate it of obligations to contribute to workers’ social protection than providing a thoughtful perspective on challenges created by rapid transformations in the world of work.”

She added: “It is strange that the World Bank would publish the WDR 2019 as its flagship development research report when most of its central assertions are not backed up by serious analysis or are even contradicted by data presented in the report.”

Burrow gave as an example the WDR 2019’s repeated claim that wide-scale deregulation of business will reduce informality, even though the report contains information showing that “informality has remained remarkably stable” despite a rapid fall of business regulation in the past two decades. “Support for further deregulation will only reinforce strategies of platform companies to subvert employment relationship rules, increase precarious work, pay poverty wages and undermine workers’ rights”, said Burrow.

Although the WDR contains some pertinent analysis of the manner in which digital businesses have accelerated tax base erosion and profit shifting, the need to tighten tax rules on these businesses is completely omitted in the recommendations section. Instead, the expansion and increase of regressive value added taxes is presented as the “first line of reform for developing countries” to finance basic social assistance.

The WDR even opposes exemptions or lower tax rates for basic necessities that could make VATs less regressive. Employer-financed social protection “is not a good fit for developing countries”, so business would be alleviated of any obligation to contribute.

“The recommendations to shift taxation from companies to consumers and to slash business regulation is reminiscent of the pro-deregulation drum-beating that we have been accustomed to reading in the Bank’s annual ‘Doing Business’ report for fifteen years. It is astonishing that the World Bank would allow the same right-wing ideology to permeate what is supposed to be its contribution to the debate on the future of work,” Burrow said.

Burrow contrasted the WDR 2019, which frequently presents selective evidence and makes unwarranted generalisations on the basis of outlier examples, with the important contributions made by the Bank’s “WDR 2013: Jobs”. The earlier WDR included an exhaustive review of economic research on the impact of labour regulations and concluded that long-held myths about such regulations being job-destroyers were not based in reality: “the impacts on employment levels tend to be insignificant or modest”.

Burrow also contrasted the anti-worker perspective of the WDR 2019 with the major step taken by the World Bank on 1 October when its new labour safeguard – which stipulates respect for workers’ rights in all Bank-financed projects – entered into effect as part of the Bank’s new Environmental and Social Framework.

Burrow concluded: “In a world in which inequality has been increasing for more than three decades and workers’ rights are constantly under threat, it is frustrating to see the Bank finally recognise the importance of labour rights in its new safeguards policy and then undercut that less than two weeks later by promoting an unabashedly pro-business agenda in the WDR 2019.”

An analysis of the WDR 2019 prepared by the ITUC’s Washington office is available here