The Doing Business Index on Minority Investor Protection: The Case of Singapore

Abstract

The World Bank’s Ease of Doing Business index has significantly affected regulations and policies regarding corporate matters around the world, and yet there has been scant academic attempt examining the use and implication of the index, especially in the area of investor protection, which is an essential element in doing business. In this paper, we examine in depth the research methodologies employed by the Doing Business project in measuring the strength of investor protection, especially in light of the recent renaming of this indicator from Protecting Investors to Protecting Minority Investors in Doing Business 2015. Using Singapore as a case study, we argue that, notwithstanding the positive changes brought in by Doing Business 2015, the variables and components chosen in this indicator essentially fail to capture the salient features of minority investor protection. We argue that minority investor protection is an area that is inherently too context-specific to be evaluated based on a unified business assumption or by pure quantitative methods. Lastly, we also provide specific suggestions to improve the Protecting Minority Investors indicator.