The World Bank is having a blog-like open discussion about the 2006 Doing Business In publication.

In one such post (cross listed on the Private Sector Developent blog here), Tim Harford defends the methodology of the project against my previous criticism.

I think we agree more than we disagree. I am a fan of the project. I too think looking at the actual laws along with expert analysis of the laws as is done by the World Bank researchers is a tremendously valuable undertaking. In part, this is because of the ability to pin-point more precisely the nature of the problem and also to act as a more objective source of data.

In fact, we are going to be evaluating whether and how we might incorporate some of the DBI data into the economic freedom index at some future point in time. It is because of this that I have done a little bit of work to compare the DBI results with the survey data from other sources. My original post expresses concern about the surpisingly weak relationship between the Doing Business In results and at least some of the business survey results.

The ultimate problem is that the law as written can be a poor indication of practice. A relative liberal regulatory regime on paper can still be a nightmare for businesses if the few regulations that do exist are haphazardly enforced or are used to extract bribes. On the other hand, a relatively strict regulatory regime on paper that is enforced fairly and without discrimination may be better from the standpoint of doing business (and even from the standpoint of freedom).

Our goals are the same, "to cut senseless red tape and improve the quality of economic institutions", but I worry that these measures will have less impact if they don't conform more closely to the general views among businesses.