Data governance is the subject of intense debate in advanced economies and increasingly among large emerging markets. And yet many complex policy questions remain unanswered. In response, World Development Report 2021: Data for Better Lives surveys the emerging landscape and provides policy makers with a framework for thinking through the issues, opportunities, and trade-offs. One thing is clear: the perspective of lower-income countries has so far been largely absent from these global debates and urgently needs to be heard.
Data are a double-edged sword. On the one hand, they offer tremendous potential to create value by improving programs and policies, driving economies, and empowering citizens. On the other hand, data accumulation can lead to a concentration of economic and political power, raising the possibility that data may be misused in ways that harm citizens. Data are a resource that can be used and reused repeatedly to create more and more value, but there is a problem—the more data are reused, the higher is the risk of abuse.
It is hard to imagine a more dramatic example of these opportunities and tensions than the COVID-19 pandemic. Countries around the world have moved swiftly to repurpose mobile phone records to monitor the spread of the virus. But at the same time they have struggled to balance this benefit against privacy concerns and the risk of misuse.
Beyond pandemic times, the statistical capacity to produce and effectively use core economic and social data is limited. Many poor countries are unable to accurately track public finances, report on external debt, or monitor their development goals. Without such data, the ability to hold governments accountable and track progress withers.
Data governance arrangements to facilitate greater use of data while safeguarding against misuse remain in their infancy. The legal and regulatory frameworks for data are inadequate in lower-income countries, which all too often have gaps in critical safeguards as well as shortages of data-sharing measures. There, the data systems and infrastructure that enable interoperability and allow data to flow to more users are incomplete; less than 20 percent of low- and middle-income countries have modern data infrastructure such as colocation data centers and direct access to cloud computing facilities. Even where nascent data systems and governance frameworks exist, a lack of institutions with the requisite administrative capacity, decision-making autonomy, and financial resources holds back their effective implementation and enforcement.
To address these concerns, World Development Report 2021 calls for a new social contract for data—one that enables the use and reuse of data to create economic and social value, promotes equitable opportunities to benefit from data, and fosters citizens’ trust that they will not be harmed by misuse of the data they provide. However, in seeking such a social contract, lower income countries are too often disadvantaged because they lack the infrastructure and skills to capture data and turn them into value; the scale and agency to participate equitably in global data markets and their governance; and the institutional and regulatory frameworks to create trust in data systems.
Forging a new social contract for data is a pressing domestic policy priority that will require strengthening national data systems and engaging all stakeholders at the national level. Because of the global scale of data, some of the most challenging aspects of the social contract also call for closer international cooperation to harmonize regulations and coordinate policies—bilaterally, regionally, and globally. Critical areas for international engagement include reform of international taxation rights for data-driven businesses, World Trade Organization arrangements for trade in data-enabled services, regional collaboration on the development of data infrastructure, international harmonization of technical standards to support interoperability, and bilateral collaboration on law enforcement and antitrust regulation.
The World Bank stands ready to support its client countries on this important and challenging agenda. The findings of this World Development Report will shape support for client countries by identifying where public and private sector investments are the most critical, defining a rich program for policy reform and technical assistance, and highlighting areas in which global initiatives can help to convene and facilitate cross-border cooperation.
Realizing the full value of data will depend on a substantial commitment and effort, and it will be difficult. But the cost of failure is a world of missed opportunities and greater inequities.
David R. Malpass
The World Bank Group