World Bank chief economist resigns amid Chile uproar

WASHINGTON: The World Bank’s chief economist resigned on Wednesday amid a scandal that erupted when he raised questions about how the institution was ranking countries – especially Chile – in a key report.

World Bank President Jim Kim announced that Paul Romer was stepping down immediately from the post he had held since October 2016, but did not specify the reason for his exit.

In his only reference to the recent dispute – which prompted Chile to demand an investigation – Kim said, “I appreciated Paul’s frankness and honesty, and I know he regrets the circumstances of his departure.”

Romer sparked controversy earlier this month when he told The Wall Street Journal the World Bank’s method for ranking business competitiveness of member countries had changed in a way that could give the impression it weighted the results due to political considerations.

This had a particular impact on Chile’s ranking in the “Doing Business” report in October, in which it dropped 23 places solely due to how the World Bank was scoring the components, not because of any changes in the government’s policies, he said.

Romer apologized to Chile “and to any other country where we conveyed the wrong impression,” and said he planned to recalculate the rankings going back several years.

His statements sparked outraged responses from World Bank economists who defended the methodology changes, and from Santiago, where President Michelle Bachelet demanded an investigation since the rankings can “impact investment and development.”

Romer later apologised in a blog post for creating the impression that he “suspected political manipulation or bias” was at play. He said he simply intended to raise the need for the institution to “do a better job of explaining what our numbers mean.”

Kim said Romer will be returning to his position as an economics professor at New York University.

“Paul is an accomplished economist and insightful individual, and we have had many good discussions on geopolitical issues, urbanization, and the future of work,” Kim said. — AFP