Glob l R ul tions, Institution l D v lopm nt, nd M rk t Authoriti s P rsp ctiv Toolkit (GRIDMAP) Fr m work nd M thodolo November 2024 Fin ncFin , Comp titiv nc , Comp n ss titiv && n ss Innov tion Innov tion © 2024 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved. This work is a product of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. The boundaries, colors, denominations, links/footnotes and other information shown in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The citation of works authored by others does not mean the World Bank endorses the views expressed by those authors or the content of their works. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution —Please cite the work as follows: “World Bank. 2024. Global Regulations, Institutional Development, and Market Authorities Perspective Toolkit (GRIDMAP). Framework and M  ethodology © World Bank.” Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e mail: pubrights@worldbank.org. Cover design: © Wenceslao Almazán / Walmazan Studio. Further permission required for reuse. CONTENTS ACKNOWLEDGEMENTS........................................................................................2 GRIDMAP FRAMEWORK.......................................................................................3 GRIDMAP: Modular approach ................................................................ 6 GRIDMAP: Framework............................................................................. 7 GRIDMAP METHODOLOGY-MODULE CONSTRUCTION..............................10 Step 1. Define Minimum Package and survey..................................... 11 Step 2. Data Collection.......................................................................... 12 Step 3. Validation process and data analysis .................................... 13 Step 4. Assessment ............................................................................... 14 Step 5. Results reporting...................................................................... 15 COMPARISON TO OTHER METHODOLOGIES AND INITIATIVES................16 NEXT STEPS...........................................................................................................19 REFERENCES........................................................................................................ 20 List of Figures Figure 1. What are the questions GRIDMAP is tackling?...................... 3 Figure 2. Digital commerce transaction value as a % of GDP, regional averages in 2022........................................................ 4 Figure 3. Digital commerce users as a % of population 15+, regional averages in 2022........................................................ 4 Figure 4. GRIDMAP framework pillars.................................................... 7 Figure 5. GRIDMAP Tools by module linkages.......................................9 Figure 6. GRIDMAP Methodology - Module construction................... 10 List of Tables Table 1. GRIDMAP tools description ......................................................8 Table 2. Related methodologies and initiatives................................. 16 ACKNOWLEDGEMENTS Elena Gasol was the Project Lead, managing the development of the methodology, data collection, data analysis of the Toolkit, and preparation of the report with Claudia Ivette Garcia Romero. Thanks go to Mona Haddad and Martha Licetti for their valuable guidance on the overall approach. Yoshihisa Hayakawa, Emanuel Alijaj, Boniface Kamiti, Gian Boeddu, Silvana Kostenbaum and Georgiana Pop for being the reviewers. Ramin Aliyev for building the survey tool, dashboard, database, and everything in between. Graciela Miralles, Xavier Cirera, Tania Begazo, Philip Grinsted, Jennifer Chien and Juni Zhu provided valuable comments on the Toolkit. Smita Kuriakose, Jaime Frias, Albert Sole, Vincent de Paul Belinga, Silvana Kostenbaum and Georgiana Pop facilitated the testing and piloting of the toolkit in their respective projects. Stacy Feuer provided invaluable overall guidance. Michael Dennis facilitated partnerships with the Asia-Pacific Economic Cooperation (APEC) and the International Standards Organization (ISO). Gabriela Szlak and Luciano Gutman incorporated lessons learned from the pilots and also contributed to the preparation of the report. Meney de la Peza worked on the economic analysis and development of the assessment. Georgina García, Elena Puche, Sofia Martinez, Mateo Garcia, Sofía Orlinsky, Micaela Schnirmajer, Delfina Bianchi, and Noelia Rozanski helped with the data collection and validation process. Melissa Knutson helped with the website and social media content. Wenceslao Almazan provided the design. We are grateful to all of them for contributing to prepare this for presentation and publication. The Toolkit project team appreciates funding support from the Spanish Fund for Latin America, which enabled the development of the consumer protection module and a special focus in the Latin America and the Caribbean. USAID and the Competitiveness for Jobs and Economic Transformation trust fund provided seed funding to develop the initial umbrella methodology, and the Data Fund facilitated the piloting of the toolkit in two countries. 2 GRIDMAP FRAMEWORK Introduction The first report accompanying this piece covers the first module of GRIDMAP: Consumer GRIDMAP--the Global Regulations, Institutional Protection. A second, upcoming report will Development, and Market Authorities Perspective cover a Module on Data Markets. These areas Toolkit--provides emerging markets and developing are particularly relevant to the most vulnerable economies (EMDEs) with a “Minimum Package” agents in the market ecosystem: individuals and of policies to build markets that are trustworthy, small and medium enterprises (SMEs). Additional safe, and competitive. The “Minimum Package” modules may follow, including topics such as sets out essential regulatory provisions, institutional market contestability, business transactions, and arrangements, and implementation and enforcement the protection of suppliers, particularly SMEs. needed for those markets to thrive. GRIDMAP will provide modules focused on various subjects of market regulation, such as consumer protection and The evolution of markets: data markets. global and digital Each module analyzes the three key pillars Digital markets have grown significantly in that comprise the Minimum Package for the EMDEs over the past decade, and growth is relevant regulatory area: legal framework, likely to accelerate in the coming years as institutional arrangements, and implementation more EMDEs adopt digital technologies. As and enforcement (Figure 1). The content of the pointed out by OECD (2018), digitalization at Minimum Package for each pillar draws from both all levels (from citizens to governments, public World Bank experience and international and regional services and businesses) was accelerated and good practices. amplified by the COVID-19 pandemic, resulting in a surge in the availability of digital services. Digitalization facilitates the insertion of SMEs into FIGURE 1. WHAT ARE THE QUESTIONS global value chains and the use of data as a useful GRIDMAP IS TACKLING? asset in all stages of production and distribution. Improvements in digital communications technologies and global connectivity, along with the adoption of technologies that can improve global value chains, integrate SMEs into the digital economy, and empower individuals, have 1 What is the Minimum Package of regulations for EMDE? unlocked new opportunities for EMDEs in the global economy. There is extensive literature on the positive impact of digitalization on a country’s productivity, growth, wages, resilience What are the 2 to shocks, and inclusion of women in the key institutional workforce, among other variables. Cirera, arrangements? Comin and Cruz (2022) used a new data collection instrument, the Firm-level Adoption of Technology (FAT) survey, to understand firms’ adoption and use of technology in EMDEs. 3 The FAT data show a significant and robust What is the actual association between the level of sophistication enforcement/implementation? of technologies adopted and used by firms and labor productivity, firm growth, job creation, wages, and resilience to crises. 3 However, the penetration of digital markets institutional arrangements, and increase the availability and the pace of growth varies significantly and effectiveness of enforcement. Although EMDEs among regions and countries, with Africa lagging may look to regulatory and institutional examples considerably. Figure 2 and Figure 3 show the regional from higher income countries with more advanced differences in Digital Commerce Transaction Value levels of digitalization, they can be overly complex or as a percentage of GDP and Digital Commerce Users otherwise unsuitable. This makes it difficult for EMDEs as a percentage of the population 15 years and older to determine which components of an overall digital in 2022. Both figures reveal important differences in regulatory environment to prioritize and adopt. digitalization among regions. An unequal adoption Indeed, a significant challenge faced by EMDEs is the rate and divergence in the use of digital markets can gap between their regulatory aspirations and their lead to increased technology gaps between countries, capacity to implement and enforce complex market generating more pronounced inequalities overall. regulatory policies and practices. Many EMDEs Despite the benefits, the development of digital aim to emulate the market regulations of developed markets can also pose significant risks to market economies. However, limitations in expertise, dynamics and individual welfare, and also exact resources, and infrastructure often restrict their ability social costs. This includes market failures stemming to apply these policies and practices effectively. This from characteristics inherent to digital markets such disparity can result in regulatory frameworks that are as the existence of multi-sided markets, economies either too lax or overly burdensome, both of which can of scale, network effects, use of algorithms, and the stifle innovation and deter investment. importance of intangible assets, particularly related to data. Chen (2009) describes the distinct features The GRIDMAP Framework bridges this gap through of digital markets and the key policy and regulatory tailored regulatory approaches that factor in these issues around digital businesses. limitations as well as other opportunities and challenges faced by EMDEs. It provides EMDEs with To build trustworthy and safe contestable digital a standardized self-assessment tool to identify gaps markets, therefore, countries need to develop in their regulatory environment for markets, make appropriate digital business regulation to take decisions adapted to their own context, and prioritize advantage of digitalization’s potential benefits interventions through the Minimum Package of policies while mitigating the associated risks. This requires and practices designed to address those gaps. countries to establish strong legal frameworks, adapt FIGURE 2. DIGITAL COMMERCE TRANSACTION VALUE FIGURE 3. DIGITAL COMMERCE USERS AS A % OF AS A % OF GDP, REGIONAL AVERAGES IN 2022 POPULATION 15+, REGIONAL AVERAGES IN 2022 5.7% 83.3% 5.4% 4.6% 4.3% 4.3% 3.7% 55.2% 54.8% 54.4% 3.3% 2.9% 21.3% North East Latin Europe & Global South Middle Sub- Europe & Latin Global East Sub- America Asia & America & Central Average Asia East & Saharan Central America & Average Asia & Saharan Pacific Caribbean Asia North Africa Asia Caribbean Pacific Africa Africa Source: Authors’ calculations using data from Statista for Digital Commerce Transaction Value and Users of Digital Commerce and World Bank Development Indicators for GDP and population. Notes: Figure 2 considers data for Digital Commerce Transaction Value published by Statista for 145 countries. Figure 3 considers data for Digital Commerce Users published by Statista for 53 countries included in this report for the Consumer Protection Module. 4 A new World Bank approach to activities (see Methodology chapter). This data sharing mechanism provides countries with Market institutions interventions information and insights to help them prioritize the types of interventions required to create GRIDMAP offers a new way to systematize and an enabling environment for their markets. The scale the support that the World Bank, through value-added partnerships developed through this its private sector and financial sector offering, initiative will also support building a more strategic provides to EMDEs to support markets and World Bank information architecture (World Bank, businesses in a global and digital context. The World Development Committee 2023). Bank has traditionally supported countries through lending operations, advisory services, and analytics to ► GRIDMAP aligns with the global challenge of improve their business environment, strengthen their Accelerating Digitalization. The new Knowledge market institutions, and grow markets. In response Compact also calls for generating “stronger to globalization and digitalization, the World Bank alignment with global challenges producing has added in-depth country support for regulatory country and global knowledge and integrating and institutional reforms to its agenda to strengthen the best knowledge available from all sources in the environment for the growth of markets in this World Bank engagements and operations.” By new context. using standardized self-assessment questions on key topics, GRIDMAP’s diagnostic tool permits New World Bank corporate priorities and rapid analysis of a country’s legal framework and increased client demand, however, require the institutional capacity at scale. World Bank to do even more – to deploy innovative tools to scale and multiply the impact of such ► GRIDMAP also responds to the Evolution’s interventions. The World Bank’s Evolution Roadmap Roadmap call to Enable Private Capital. As calls for the World Bank to take on a new role as part of its new Playbook, the World Bank has a development institution, with the World Bank embarked on a broad effort to better identify, Playbook outlining how to “invest in development develop, and deploy solutions that address the solutions […] in a way that maximizes impact at scale” barriers to private sector investment. GRIDMAP is (World Bank, Development Committee 2023). part of a plan by the World Bank Group’s Finance, Competitiveness and Innovation Global Practice GRIDMAP responds to this new corporate agenda (FCI) to strengthen its diagnostics and analytical with an innovative diagnostic tool that can rapidly toolkits to improve pre-conditions for effective assess the markets regulatory environment and scale up in private sector development and private identify gaps and solutions. GRIDMAP responds to capital facilitation. The World Bank’s Private Sector several of the priorities highlighted in the Playbook as Development Sector Note for Development Policy follows: Operations specifically mentions interventions ► GRIDMAP creates a new data mechanism that support market institutions and help improve under the World Bank’s new Knowledge regulations, on issues such as consumer protection, Compact. The Compact calls for “generating, competition, intellectual property, and SMEs as using and sharing data more systematically critical for Private Capital Enabling. […] so countries can design policies and ► GRIDMAP responds to client demand. Over the prioritize support where they are most needed” past few years, client requests for support to help (World Bank, Development Committee 2023). build stronger market institutions have increased GRIDMAP’s self-assessment tool generates significantly. EMDEs in all regions are looking at the data for a new public database, created intersections between these institutions. GRIDMAP in partnership with other international builds a toolkit that allows EMDEs to prioritize and regional organizations, that contains their requests and the World Bank to provide information on countries’ legal frameworks, more systematic support at scale. This tool can regulatory authorities and other institutional be expanded into different modules of interest to arrangements, and powers and enforcement World Bank clients. 5 GRIDMAP: MODULAR APPROACH GRIDMAP uses a modular approach, applying the data markets have been identified as priority modules same methodology to different regulatory areas for GRIDMAP because consumers face significant such as consumer protection, data markets and information asymmetries and may be subject to abuse contestable markets. By integrating the different of market power. Among all the agents in the digital modules under the same framework, GRIDMAP and global market landscape, consumers are the most facilitates consistent regulatory frameworks that vulnerable, especially given the low digital literacy in promote efficient markets and innovation. some EMDEs. Some of the risks faced by consumers are excessive data collection, risks of discrimination and bias The modular nature of GRIDMAP allows for based on automated decision-making, unfair practices, focused attention on specific areas of market and data security risks. Additional modules may look at regulation such as consumer protection and topics that can particularly affect business transactions. data market regulations, that affect the most vulnerable agents in the market ecosystem: The modular approach has already been integrated individuals and SMEs. Consumer protection and successfully into World Bank operations such as Development Policy Loans, Investment Project Financing, and Advisory Services and Analytics. The World Bank developed GRIDMAP based on the experience of working over years in different countries on these topics, and GRIDMAP has been successfully piloted already in several World Bank lending operations and advisory services and analytics. The feedback and lessons learned from these earlier projects have been incorporated in the methodology for this initiative.1 GRIDMAP allows the World Bank to open a dialogue on key topics for EMDEs and provides countries with the first global standardized database on specific topics regarding regulations and institutions. These tools will allow them to learn from good practices not just from high-income countries with more advanced levels of digitalization and integration into the global value chains, but also from relevant experiences from their peers. GRIDMAP can be used as the first step in an engagement with the World Bank on these topics; it can also be leveraged by regulatory authorities and by other development practitioners in their engagements. GRIDMAP creates a self-assessment survey that countries can use to track progress on improving their legal and institutional frameworks and enforcement. 1 The list of World Bank projects where GRIDMAP has been tested and piloted since 2023 includes: Philippines First Digital Transformation Development Policy Financing (DPF) (P179361); Philippines Second Digital Transformation DPF (P180336); Rwanda - Boosting Green Finance, Investment and Trade in Rwanda DPF (P505244); Republic of Congo Third Fiscal Management and Inclusive Growth DPF (P180398); Uruguay Institutional Strengthening for Greater Competitiveness IPF (P180638); Rwanda Programmatic Advisory Services and Analytics (PASA) – Creating a Competitive Landscape for Business in Rwanda (P179321); Philippines PASA – Philippines Competitiveness (P173514); Kingdom of Saudi Arabia Reimbursable Advisory Services – Digital Economy Diagnostic (P180871). 6 GRIDMAP: FRAMEWORK GRIDMAP sets forth three pillars that form the Minimum Package required for EMDES to build trustworthy and safe contestable markets: (i) the legal framework, (ii) the institutional arrangements, and (iii) the availability and effectiveness of enforcement (Figure 4). FIGURE 4. GRIDMAP FRAMEWORK PILLARS Pillar 1 Pillar 2 Pillar 3 Legal Institutional Enforcement and Framework Arrangements Implementation • Legal, regulatory, • Minimum institutional • Assesses effective and policy measures requirements to implementation for the Minimum implement Pillar 1 and enforcement of Package Pillars 1 and 2 • Includes staff, budget, enforcement powers, • Focuses on evidence tools, processes, and of usage of powers cooperation to enforce and facilitate compliance Source: World Bank. Each GRIDMAP module contains three pillars reflecting a Minimum Package for the legal framework, the institutional arrangements, and enforcement and implementation. Each pillar is divided into categories, defined as specific topics of relevance, and each category is further divided into components. Every component is analyzed using at least one specific question in the GRIDMAP diagnostic self-assessment questionnaire. GRIDMAP includes seven tools for each module, as described in Table 1, and the linkages among the tools are presented in Figure 5. 7 TABLE 1. GRIDMAP TOOLS DESCRIPTION Tool Description A. Minimum Package Identifies international practices and codifies findings into pillars, categories, and components. B. Data Collection Tools B1. A Rapid self-assessment survey to collect regulatory authorities’ direct answers. B2. A Deep dive analysis, performed by the World Bank team in reviewing regulatory evidence, reports, and documents in the context of a deeper bilateral engagement between the World Bank and a country. C. Global Database The database is populated with the data collected from the assessment tools. Data is used for the GRIDMAP assessment and as input for future research and detailed analysis. D. Assessment System The GRIDMAP Assessment is constructed using data collected through the self-assessment survey. The Assessment assigns points by pillar and provides countries with a standardized evaluation of the gaps in their legal framework, institutional arrangements, and enforcement and implementation, compared to the Minimum Package and to averages by region, income group, and legal system. E. Maturity Assessment Helps countries identify areas of opportunity, and the most relevant Profile (MAP) interventions to improve their legal, institutional design, implementation, and enforcement. F. Bank of Good Practices Collects good practices of how authorities deploy all pillars. It is meant to encourage other authorities to be inspired to improve their practices. G. Dashboard To disseminate the Minimum Package and findings classified by all respondents, region, and income level. Using these tools, EMDEs can benchmark against international good practices, identify regulatory gaps, and pinpoint areas of potential improvement. Countries can then leverage these tools to understand where they stand relative to their peers, draw inspiration from successful regulatory models, and identify potential areas for collaboration or adaptation. As markets expand and mature, this comparative analysis can help EMDEs move beyond the Minimum Package by adopting more mature regulatory policies and evolving and refining institutional arrangements. 8 FIGURE 5. GRIDMAP TOOLS BY MODULE LINKAGES G. Dashboard Data analysis By region, income level and legal system E. Maturity D. Assessment System Assessment Profile (МАР) GRIDMAP Assessment F. Bank of Assessment Good Practices by Pillar 1st wave country data C. Global Database B. Data Collection Tools B2. Client-based B1. Rapid Self-assessment Online Deep-dive Survey Analysis A. Minimum Package P1. P2. P3. Legal Institutional Implementation Categories Framework arrangements and Enforcement Components Source: GRIDMAP framework. 9 GRIDMAP METHODOLOGY- MODULE CONSTRUCTION For each module, the GRIDMAP methodology involves a process that includes five steps, as presented in Figure 6. FIGURE 6. GRIDMAP METHODOLOGY - MODULE CONSTRUCTION STEP 1 STEP 3 STEP 5 DEFINE MINIMUM VALIDATION PROCESS RESULTS PACKAGE AND SURVEY AND DATA ANALYSIS REPORTING • Review of legal framework • Report on findings • Identify elements, and Minimum components, and • Review of data available in Package practices categories per pillar public reports • Graphics to identify • Develop the • Request sources and Minimum Package self-assessment survey supporting documents achievement by (questions, answer options) income level and • Experts and international • Adjust survey responses regions bodies Minimum Package • Income level and regional • Online dashboard validation process data analysis STEP 2 STEP 4 DATA ASSESSMENT COLLECTION CONSTRUCTION • Identify and contact • Define Minimum Package authorities points per component • Online interview to guide • Define component weights self-assessments considering relevance • Completion and submission • Calculate Pillar Assessment of self-assessments by and GRIDMAP Overall authorities Assessment Source: World Bank. Each of these steps is explained in more detail in this section, using the work done to create the first module on consumer protection to illustrate the process. 10 STEP 1. DEFINE Survey development The Minimum Package is translated into a MINIMUM PACKAGE survey format. The questions are designed to collect information from authorities (Step 2) AND SURVEY about all categories and components of the Minimum Package by presenting different types of questions and answer options. Identify elements, components, The survey includes five types of questions: and categories per Pillar ► Context questions. General characteristics Pillars, categories, and components are included of the authority and legal system. The as part of a Minimum Package based on the World answers to these questions are not part of Bank’s experience working with economies and the Assessment System. Examples: What is cross-referencing key international instruments. your nation’s legal system (common law vs. civil law)? Is the authority under another ministry or ► To identify the Pillar 1 Minimum Package, government body? the team compiled a body of knowledge to complement the World Bank’s experience. ► Binary response questions. These For each category, the team analyzed whether “yes/ no” questions are designed to existing regulations were sufficient to address determine whether a country’s framework digital issues or whether they required additional addresses a specific issue. The answers nuance or new, specific provisions. In addition to to these questions provide 0/1 points the collected body of knowledge, to define the in the Assessment System. Examples: first iteration of the Minimum Package, the team When something goes wrong with an online relied on World Bank experience working on these transaction, does the legal framework address topics with economies such as the Kingdom of the liability of intermediaries? Does the legal Saudi Arabia, Nigeria, the Philippines, the Republic framework require a transaction record for of Congo, Rwanda, and Uruguay. digital transactions? ► The team drew on its experience working on ► Multiple response questions. These strengthening institutions to build Pillars 2 questions assess the maturity level of a and 3, and analyzed relevant work and surveys specific topic. The points received for these done at different points in time by other questions in the Assessment System depend international organizations such as UN Trade on how many of the options provided are and Development (UNCTAD), the Organization selected. The higher the number of elements for Economic Co-operation and Development (option answers) selected, the higher the (OECD), Asia-Pacific Economic Cooperation maturity. In some of these questions, (APEC), Association of Southeast Asian Nations authorities are given the opportunity with (ASEAN), and the African Union. Pillar 2 categories blank space to share their experience in look at the regulatory and/or enforcement implementing a component element (i.e., authority (or authorities) roles and powers, which Other, please explain). Example: Does the legal can include persuasion tools and sanctions, framework cover unfair and deceptive business cooperation arrangements with other authorities, practices? Check all that apply: a) Unfair self-regulation and co-regulation mechanisms, business practices are prohibited; b) Deceptive education and awareness, transparency and business practices are prohibited; c) Businesses processes, and resources. must be able to substantiate any claims in their advertising; d) Environmental claims that ► Pillar 3 reviews information to confirm mislead consumers are prohibited; e) Special whether an authority has recently used its protections are provided to one or more special powers (Pillar 2) and assesses authorities’ categories of consumers; f) None of the above. resources, internal processes, and whether they make public some critical pieces of their work. 11 ► Questions that require data as a response. In Pillar 3, numeric data is also collected. For STEP 2. DATA this version of the report, the answers to these questions are not considered in the Assessment. In future versions, these data may COLLECTION The World Bank team gathers contact information be normalized to the country’s digital market from the authorities that regulate the module’s size (total transaction value for digital markets topic. This process can be time-consuming because or users of digital commerce) or other macro there might not be a contact database in hand. variables (GDP, total public expenditure, total The objective is to identify and contact a high-level population) and included in the Assessment. public servant who can bring together multiple area These data are also used for deep dives with representatives to respond to the survey. countries where the World Bank has a project and the opportunity to engage at a deeper level. The methodology is based on a rapid self- Examples: How many full-time employees in the assessment performed by the authorities, using authority work mostly on consumer protection? the survey questionnaire developed during Step 1. How many full-time non-administrative staff This type of approach implies perception bias by work on complaint handling, investigations respondents. To reduce this bias and improve the and sanctions? and from those, how many are quality of results, a comprehensive effort is then attorneys? Please provide the latest annual budget undertaken by the World Bank team to present the of the authority that is related to consumer questionnaire in detail to the authorities, respond protection (in USD). to any questions regarding the process, and obtain preliminary answers to the self-assessment ► Bank of good practices. Responses to these questionnaire. This guided self-assessment is done questions will help create a bank of good by scheduling online meetings with the authorities of practices. The answers to these questions countries included in the survey. After the interview, do not provide any points in the Assessment a prefilled online survey is sent to the authority for System. Example: Are there any good practices their verification and completion. In some cases, examples you would like to share with us? (Topics authorities fill out the survey on their own without an may include Enforcement, E-Commerce (supplier interview if that is their preference. & consumer side), ODR, Online Platforms, Unfair Business Practices). GRIDMAP acknowledges that there are likely additional authorities and regulations covering Experts and international bodies specific issues or sectors that overlap with those of the main authority interviewed. The purpose Minimum Package validation of this work is to cover the main market regulator/ The team validates the Minimum Package and enforcer in the country, while acknowledging that the the survey draft questionnaire with experts from modules cover complex topics where different pieces relevant international organizations. The team of the institutional puzzle are distributed differently iterates on the survey questions and answers based among countries. Each authority has responded to on the experts’ opinions, including clarifying the the survey, when relevant, on the basis of their own language to accommodate different implementation jurisdiction and, when relevant, on the basis of their models. The team also iterates the survey on the knowledge of their country’s legal framework. basis of more interviews with the agencies in Step 2 to clarify and refine questions. 12 The methodology considers the legal framework as a whole. GRIDMAP does not STEP 3. expect countries to have a law covering a specific issue necessarily, but rather asks whether the VALIDATION PROCESS AND economy is using its existing legal framework to cover the issue at hand. This translates into the following: ► Specific vs. general. GRIDMAP considers DATA ANALYSIS issues covered as long as the authority The World Bank team runs a data quality uses any instrument in the legal framework process by performing spot checks. This process at their disposal to cover them. For increases the accuracy of responses provided example, they may not have a specific law by authorities. Documents and links are reviewed, on “greenwashing,” but they may have a checking, for instance, whether the answers related provision about misleading advertising to Pillar 1 correspond to existing instruments in the that they are using to bring cases that legal framework, and whether there are published cover those types of environmental or reports with the data that the authority references sustainability claims. as being published in the questions for Pillar 3. Specific attention is provided to responses by ► Common law vs. civil law. GRIDMAP authorities in the following cases: also considers issues covered regardless of the type of instrument used in the ► The results differed widely from what was legal framework by the authority. For expected by the team and previous expert example, if they rely on existing case law or opinion, possibly due to perception bias by the mandatory guidelines rather than on a law responding Authorities. or regulation, GRIDMAP considers these alternative instruments as long as they are ► Missing values. Some countries may send mandatory. self-assessment surveys with many missing values, particularly in those questions included ► Federal vs. state. In economies where in Pillar 3 that require reporting data on jurisdiction is distributed between a central enforcement and resources. government and regions/provinces or states, GRIDMAP considers a topic covered The validation process by the World Bank team if a majority of a country’s state or regional/ includes a review of general law provisions, a provincial laws cover that issue. review of data available in public reports, follow- up emails, and online meetings in cases where Still, the team acknowledges that there are a review of general law provisions and publicly outliers that do not fit the methodology. reported data implied results significantly different Economies are complex and varied in the way from what was reported by agencies. In some cases, they implement. For such outliers, the team the validation process can result in adjustment by presents the results in the report but does not the World Bank team of responses to the survey and run the comparison against regional or income related points in the Assessment System. Moreover, level averages. the data analysis and validation processes include thorough analysis by the team of results within regions and income level groups. 13 STEP 4. clearly defined obligations in one area but complete absence of regulation in another area will likely not ASSESSMENT provide an optimal result. Covering, at least partially, all the areas of regulation that are relevant is desirable. Hence, in calculating the Pillar Assessment, the team The objective of the GRIDMAP Assessment is to considered not only the sum of the points achieved, provide countries with a standardized evaluation but also if the Minimum Package is present in all of the for each module of the current status of their components. To reflect this, each Pillar Assessment legal framework, institutional arrangements comprises two elements: and implementation and enforcement. This may help countries identify areas where work needs to ► The weighted average of points received in all be done. Each country will be able to compare its components receives an 80 percent weight in the results in the GRIDMAP Assessment to the results Pillar Assessment. corresponding to the Minimum Package, and to averages by regions and income groups. ► The overall strength, estimated as the weighted sum of components covering at least the Minimum An independent Assessment by Pillar is Package, receives 20 percent weight in the Pillar calculated to provide relevant insight to countries Assessment. as to areas where the potential for improvement exists. This may help countries identify areas where The three Pillar Assessments were computed by a work needs to be done. Each country will be able to variation of the standard weighted average formula compare its results in the GRIDMAP Assessment to to ensure that the values are normalized to fall the results corresponding to the Minimum Package, between 0 and 1. The approach involves dividing and to averages by regions and income groups. the sum of the multiplication of the points for each component with their respective weights by the sum The Overall GRIDMAP Assessment is: of the multiplication of the maximum points for each component with their respective weights. This approach GRIDMAP Overall Assessment was previously used in the construction of the GovTech (Pillar 1 Assmt. + Pillar 2 Assmt. + Pillar 3 Assmt.) Maturity Index (Dener, et al. 2021). = 3 For each country, Pillar Assessment is calculated according to the following formula: While the Pillar Assessment provides detailed information regarding the strengths of each Pillar country and the most relevant areas of ∑N xw ∑N yw i=1 i i i=1 i i opportunity, the Overall Assessment stresses the = 0.8 +0.2 importance of comprehensiveness and covering ∑N i=1 xmaxi wi ∑N i=1 ymaxi wi all pillars. That is, for safe and trustworthy markets to develop, it is necessary to have at least the Where: Minimum Package for each pillar. xi denotes the points received for component i Within each Pillar, each category and component has a different relevance. Hence, in calculating the wi denotes the weight given to component i Pillar Assessment, the team used weights to reflect xmaxi denotes the maximum possible points for the relative importance of each component. Weights component i were defined by the team considering the opinions of senior officials from authorities in several developed yi is a dummy variable that takes value of 1 if countries, experts in international organizations such the Minimum Package points are attained for as OECD and the International Consumer Protection component i and 0 otherwise Enforcement Network, World Bank experts, and experts in the private and academic sector. ymaxi denotes the maximum possible points for variable yi which implies summing 1 for all components The outcome of a particular regulatory framework depends, among other things, on its N denotes the number of components in each Pillar comprehensiveness and overall strength. Having 14 The Pillar Assessment and the GRIDMAP Overall Assessment have the following STEP 5. RESULTS characteristics: ► An increase in the points obtained by any REPORTING country in any of the questions in the survey For each GRIDMAP module, a report is produced increases the score in the corresponding Pillar explaining the Minimum Package for that Assessment, as well as in the GRIDMAP Overall module and the findings. The results of the Pillar Assessment. Assessment and Overall Assessment calculation will be reported, at first, as regional and income group ► The score in all three Pillar Assessments and in averages, and analyzed in the report on findings the GRIDMAP Overall Assessment is between and Minimum Package practices. The report will zero and one. Scores are zero if, and only if, all explain more in depth the different categories and components record zero scores, while they are components for each module, and analyze the survey one if, and only if, all components record the results at the component level, including, when maximum possible points. appropriate, using other variables such as the type of legal system to analyze trends. ► The Assessment is flexible and could incorporate additional components or variables GRIDMAP will also provide graphics both in the in future versions. report and in an online dashboard, to allow countries to identify trends and the Minimum For each Pillar Assessment and for the GRIDMAP Package. Country level data will be released as Overall Assessment, different levels of maturity part of the next steps, and countries will be able to will be defined. The purpose is not to rank countries compare their specific results with their regional in terms of performance, but to illustrate the current average, income group average, and the result state of regulation, to identify good practices and associated with the Minimum Package. This will allow areas for possible improvement. The maturity levels countries to identify areas of potential improvement to be considered are: Developing, Emerging, and and define priorities in specific actions to improve Established. The scores associated with each maturity their regulatory framework, institutional oversight level and the corresponding maturity level of each implementation and enforcement. An online country are still under definition and will be included dashboard is under construction that will present in future versions of the report. these results in detail in the near future. 15 COMPARISON TO OTHER METHODOLOGIES AND INITIATIVES There are several other methodologies and 1. Business Ready – B-READY (World Bank 2023) initiatives by the World Bank and other is a quantitative assessment of the business organizations that are related to GRIDMAP environment for private sector development , (Table 2). Although these methodologies and considering the regulatory framework, public initiatives can generate relevant insights into services, and efficiency for firms and markets. countries’ regulatory framework, business B-READY covers ten topics – business entry, business environment and digital market development, location, utility services, labor, financial services, GRIDMAP’s unique characteristics differentiate it international trade, taxation, dispute resolution, from these existing, complementary, initiatives. market competition, and business insolvency – GRIDMAP generates a new public database on organized following the life cycle of the firm and its not only the legal framework but also on relevant participation in the market. B-READY and GRIDMAP authorities, their powers, and enforcement are strongly complementary in several ways. activities around the world to help countries prioritize regulations and actions in different key ► While the array of topics covered by B-READY areas that can help them grow their markets. is wider than those covered by GRIDMAP, the latter offers a more in-depth analysis of the legal framework, institutional arrangements, and enforcement in the topics covered. TABLE 2. RELATED METHODOLOGIES AND INITIATIVES Methodology or initiative Type of document Business Ready (B-READY) Public - WB GovTech Maturity Index (GTMI) Public - WB World Development Report 2021. Data for Better Lives Public - WB World Development Report 2024. Economic Growth in Public - WB Middle-Income Countries Global Privacy Assembly Census Public Global Data Regulation Diagnostic (GDRD) Public - WB UNCTAD World Consumer Protection Map Public Digital Business Questionnaire Internal WB Digital Trade Regulatory Readiness (DTRR) Internal WB 16 ► B-READY captures the view of the private sector, any interaction with government officials for both the perspectives of entrepreneurs and the validation of information found on public broader private sector development interests. websites. However, for the GovTech Maturity Index Data collection is done by private sector expert 2022 Update, an online survey was conducted consultations and World Bank Enterprise Surveys. with relevant country officials to reflect the latest Meanwhile, GRIDMAP captures the view of the developments, including implementation progress authorities responsible for the different regulatory and achievements in their GovTech initiatives. In this areas under analysis. sense, the process of data collection and validation became more similar to what is done as part of the ► B-READY’s final output will be a score that will be GRIDMAP methodology. While the methodology for periodically updated and will allow comparisons building the GTMI and GRIDMAP are very similar, between countries and through time. GRIDMAP the topics analyzed, and objectives are significantly aims to provide specific regulatory diagnostics for different. countries and recommendations according to a country’s maturity level. 3. The World Development Report: Data for Better Lives (WDR21) (World Bank 2021) highlights the 2. The GovTech Maturity Index (GTMI) (Dener, et al. importance of data governance, which is highly 2021) is an index based on 48 key indicators for relevant in GRIDMAP, particularly for the data 198 economies in four GovTech focus areas: core markets module. The report offers four high-level government systems, public service delivery, citizen recommendations, which are well aligned with the engagement, and GovTech enablers. The objective good practices identified as part of the Consumer of GTMI is to provide a baseline and benchmark for Protection and Data Market modules: forge a new GovTech maturity, identify areas for improvement, social contract for data that (i) increases data use and assist government officials, the World Bank, and reuse to realize greater value; (ii) creates more and other interested parties in the design of new equitable access to the benefits of data; (iii) fosters digital transformation projects. The GTMI was trust through safeguards that protect people from constructed based primarily on the World Bank’s the harm of data misuse; and (iv) paves the way for GovTech data set, which presents comprehensive an integrated national data system. WDR21 divides information collected from government websites. data policies into data enabling and data safeguards The methodology for GTMI shares significant policies. GRIDMAP, for its second module on data similarities with the construction of the GRIDMAP markets, leverages the survey that the WDR21 Assessment. In both cases: team put together to go more in depth into the legal framework for two of the safeguards – data The scores are calculated using weights privacy and cross-border data flows – and adds based on expert opinion to reflect the relative a critical element of the GRIDMAP methodology: importance of different variables, defined as Pillars 2 and 3 on institutional arrangements and indicators in GTMI and components in GRIDMAP. implementation and enforcement. The calculations include a limited number of variables capturing the extent to which de jure 4. The World Development Report 2024: Economic elements are actually implemented. However, Growth in Middle-Income Countries (World Bank the calculations do not account for results and 2024) will explore the challenges of economic outcomes of the practices being evaluated. growth in middle-income countries and propose practical policy recommendations. It aligns with Countries can be grouped into different GRIDMAP in recognizing that challenges of economic categories (GTMI) or maturity levels (GRIDMAP) growth are not the same across all countries, and according to the scores obtained. The purpose that well-functioning markets need an ecosystem of of these classifications of countries is not to rank institutions and appropriate regulatory frameworks countries in terms of performance, but to illustrate that are currently underdeveloped in some the state of the variables being analyzed and to countries. Moreover, both instruments are built on identify good practices and areas for possible the principle that market-based regulation enables improvement. business dynamism and competition, productivity The main difference in methodology between gains, jobs and innovation. This WDR also develops a the 2021 GTMI and GRIDMAP Assessment is methodology and survey for assessing the strength that the construction process of the World of market institutions, that GRIDMAP has leveraged Bank’s 2021 GovTech data set did not include for its Pillars 2 and 3. 17 5. The Global Privacy Assembly (GPA) Census 2020 Protection initiative provides relevant indicators and 2023 provide a comprehensive overview of and information on the status of consumer law and institutional arrangements, implementation, and policy worldwide (UNCTAD 2016). The scope of this enforcement for governmental personal data tool is not limited to online consumer protection protection authorities that are members of GPA. and does not consider institutional arrangements GRIDMAP took this methodology as one of the or implementation and enforcement. Hence, sources for creating the survey for Pillars 2 and 3 GRIDMAP is a good complement. UNCTAD also for the first two modules. GPA is able to compare publishes an organized inventory of worldwide the evolution of the agencies from its 2020 census legislation on Data Protection and Privacy, to its 2023 census for those agencies that were Electronic Transactions, Consumer Protection, and part of both censuses, and provide valuable data. Cybercrime. (UNCTAD 2021). The inventory includes GRIDMAP does not currently have a time series, the name of the law, if existing, by country, and the but it is rather a picture of where the authorities relevant links for access. stand when the survey was taken. GRIDMAP adds 8. GRIDMAP survey questionnaires built upon the layer of Pillar 1, on the legal framework, and the World Bank’s Digital Business Questionnaire the dimension of defining a Minimum Package, (Zhu, et al. 2022). There are close similarities in to assess the status of different countries’ the questions used in the self-assessment surveys frameworks across the different categories in all for some topics such as prohibition of unfair three pillars. Through GRIDMAP, authorities are and deceptive business practices, transparent able to see how they compare vis-à-vis peers in and clear terms and conditions, and information the region and peers by income level. GRIDMAP protection and security measures. Furthermore, also may reach a larger set of authorities that are GRIDMAP introduces relevant innovations, such more focused on EMDEs, as it is not limited to as recognizing differences in the legal system of GPA members. different countries (common law vs. civil law); going 6. The Global Data Regulation Diagnostic Survey in-depth in each of the topics covered, adding Dataset 2021 (GDRD) (World Bank 2021) provides institutional arrangements and enforcement; and a comprehensive assessment of laws and offering specific recommendations based on a regulations on data governance, building country’s maturity level. and expanding on the WDR21 methodology 9. While there are coincidences in the topic and survey. This is very relevant for GRIDMAP, selection between GRIDMAP and Digital Trade particularly its Data Markets module. GRIDMAP Regulation Readiness (DTRR), GRIDMAP takes builds on this assessment, going in-depth for into account relevant aspects that were not two of the data safeguards policies that GDRD considered in the DTRR, such as considering covers, adding institutional arrangements instruments that may vary between common and enforcement, and offering specific law and civil law countries, and considering the recommendations based on a country’s maturity legal framework as a whole, including secondary level. GRIDMAP takes into account relevant aspects regulation, self-regulation practices and that were not considered in the GDRD, such as regional/state for federal states laws. GRIDMAP recognizing the differences between common complements DTRR, by going more in depth in law and civil law countries, and considering the the topics covered, and adding the institutional legal framework as a whole, including secondary arrangements and enforcement angle. GRIDMAP regulation, self-regulation practices, and regional/ covers fewer topics than DTRR in this first edition. state for federal states laws. GDRD complements DTRR covers a broader set of topics beyond the GRIDMAP as it has more breadth in terms of the GRIDMAP modules, and offers as a complement the topics covered. possibility to locate relevant laws that are the basis 7. UNCTAD has several initiatives aimed at for their responses, as their methodology relies on providing comparable information on the being able to trace a response back to an article of regulatory framework and market institutions the law. In this sense, in the future, GRIDMAP may in place around the world. The World Consumer be able to highlight for DTRR cases where general regulations are being applied to specific situations. 18 NEXT STEPS Additional steps can strengthen the GRIDMAP Framework in the near future. Some next steps already identified are: ► Definition of levels of maturity and Maturity Assessment Profile (MAP) by country. For each Pillar Assessment and for the overall GRIDMAP Assessment, different levels of maturity will be defined. The purpose is not to rank countries in terms of performance, but to illustrate the current state of regulation, to identify good practices and areas for possible improvement. The maturity levels considered are: Developing, Emerging, and Established. The scores associated with each maturity level and the corresponding maturity level of each country are under definition. ► Add more countries to the sample and enrich and deepen the analysis. The team will increase the sample of countries considered in the analysis. Both the Consumer Protection and Data Market survey questionnaires have been sent to a significant number of countries that have not yet completed them. The team will continue to follow-up with these countries to obtain their responses and establish contact with new Authorities that have not been invited to participate so far. The team will also reassess and deepen the current analysis with the larger sample and adjust as needed. ► Add more modules. Additional modules will be developed to cover the most relevant topics for market institutions affecting the development of safe and trustworthy markets. The next modules to be developed are related to market conducts by digital businesses and business transactions. ► Good Practices. The team has identified specific good practices by some Authorities in a variety of areas. Moreover, some Authorities have shared through the questionnaire good practices that they identified in their regulatory framework, institutional oversight, and implementation and enforcement. These practices will be presented in a Good Practices Report, followed by building a bank of good practices. ► Database. As the team continues to expand the sample and validate data, the team will release the country level database as part of the dashboard. ► Contest. The World Bank team is collaborating with ICPEN in the organization and promotion of the "2024 Consumer Protection Good Practices Contest" that has been launched with the following topics: authorities' partnering with third parties; complaint handling; and cross- border cooperation. 19 » REFERENCES Aly, Heidy. 2022. Digital transformation, UNCTAD. 2016. Consumer Protection Map. https:// development and productivity in developing unctad.org/topic/competition-and-consu- countries: is artificial intelligence a curse or a mer-protection/consumer-protection-map. blessing? Review of Economics and Political UNCTAD. 2021. Data Protection and Privacy Legislation Science, Vol. 7, No. 4, pp.238-256. Worldwide. https://unctad.org/page/data-pro- Chen, Rong. 2019. Policy and Regulatory Issues with tection-and-privacy-legislation-worldwide. Digital Businesses. Policy Research Working World Bank. 2023. Business Ready Methodology Paper 8948, World Bank Group. Handbook. https://thedocs.worldbank.org/ Cirera, Xavier, Diego Comin, and Marcio Cruz. en/doc/357a611e3406288528cb1e05b3c7df- 2022. Bridging the Technological Divide: da-0540012023/original/B-READY-Methodolo- Technology Adoption by Firms in Developing gy-Handbook.pdf. Countries. World Bank. World Bank. 2021. Global Data Regulation Diagnostic Dener, Cem, Hubert Nii-Aponsah, Love E. Ghunney, Survey Dataset. https://datacatalog.worldbank. and Kimberly D. Johns. 2021. GovTech Maturity org/int/search/dataset/0043590/global-data-re- Index: The State of Public Sector Digital Transfor- gulation-diagnostic-survey-dataset-2021. mation. Washington, DC: World Bank. https:// World Bank. 2021. World Development Report: elibrary.worldbank.org/doi/abs/10.1596/978- Data for Better Lives. https://openknowledge. 1-4648-1765-6. worldbank.org/bitstream/handle/10986/35218/ European Parliament. 2019. "Contribution to 9781464816000.pdf. Growth: Consumer Protection. Delivering World Bank. 2024. World Development Report: economic benefits for citizens and businesses. Economic Growth in Middle-Income Policy Department for Economic, Scientific and Countries. https://thedocs.worldbank.org/ Quality of Life Policies." en/doc/ba24094c4f9f37714f07345b150 IFC. 2012. Empowered Consumers and Growth: 5c930-0050062023/original/WDR2024-Con- Literature Review. ICF International Company, cept-Note.pdf. GHK Consulting. World Bank, Development Committee. 2023. Ending International Competition Network. 2022. ICN Poverty on a Livable Planet: Report to Governors Project: 'Competition law enforcement at the on World Bank Evolution. https://www.devcom- intersection between competition, consumer mittee.org/content/dam/sites/devcommittee/ protection, and privacy'. doc/documents/2023/Final%20Updated%20 Evolution%20Paper%20DC2023-0003.pdf. OECD. 2018. Bridging the Digital Gender Divide. Include, Upskill, Innovate. Paris. https://www. Zhu, Tingting Juni, Philip Grinsted, Hangyul Song, oecd.org/digital/bridging-the-digital-gen- and Malathi Velamuri. 2022. A Spiky Digital der-divide.pdf . Business Landscape: What Can Developing Countries Do?. The World Bank Group. 20 Global Regulations, Institutional Development, and Market Authorities Perspective Toolkit (GRIDMAP) Framework and Methodology Fin nc , Comp titiv n ss & Innov tion