The conclusion, that authoritarian countries lie about GDP, is completely plausible
I thought in authoritarian countries GDP was real but has no relation to people's lives because it all goes into a few Swiss bank accounts.
Only starting on the paper, but I wonder if it's measuring accuracy of national stats, as opposed to manipulation of them. eg, countries with lots of tax evasion (like, stereotypically, Mediterranean ones) might show similar issues, butin the opposite direction; authoritarian places with big SOE sectors will have national stats built on possibly inflated returns from those sectors; etc.
I mean, I don't have the expertise to evaluate the study's predictive power, but it's simply a fact that China is fudging its GDP, and I'd be amazed if Russia wasn't. Frankly most countries do around the margin, it's just tends to be bigger scale and more blatant in authoritarian countries, because they don't have to use tools like PPPs, quasi-public entities and off-balance sheet derivatives, they can just make up numbers.
I once worked with a guy whose job is was to calculate GDP numbers for a certain small country and he described the figure that was produced as highly speculative and also noted that his predecessor had been fucking up the calculation methodology for years.
Finding out how the guy before you was fucking up the calculations is one of the great joys in life.
Particularly since I've never actually enjoyed the lamentations of women.
It's right there in the name "lament". It's not really supposed to be enjoyable.
Conan was definitely of the Germanic interpretation.
they don't have to use tools like PPPs, quasi-public entities and off-balance sheet derivatives, they can just make up numbers.
These tools would all affect reported government debt and spending, but I can't see how they would affect GDP.
6: This may be one of the great differences between research and development programmers.
Relevant tweet from a seasoned China observer.
Note to self: Development programmers like to hear women cry.
I read something good about dictatorships fudging GDP growth numbers -- they clearly are,and it has big consequences -- but now I can't find it because it was on Twitter somewhere. Value add!
AIPMHB, Tooze's book on German stats history is super interesting.
Mossy, which Tooze book in particular? I'm in the middle of _The Deluge_ right now.
Statistics and the German State, 1900-1945
Furniture test for GDP fakery. Please compare sale and struck-through original price. Once a great country....
|| Dear lord but this is an astonishing story, they're coming fast and furious now.
21: Wow. I am only half keeping up, but the scope here is incredible.
We're a banana republic now, and not in the "understated clothing for professional women" way.
At least we still stand against profanity. Or academic achievement.
A little further into the OP, the n actually appears quite large:
After combining the Henderson et al. (2012) data on GDP and lights with the Freedom House data on democracy, I am left with 2,914 observations for 179 countries between 1992 and 2008.
It's pretty easy to get big N when you have all the countries in the world multiplied by all the years you are looking at. But if there's not much variance (because, for example, Sweden and Denmark are basically the same except Sweden has more alcoholics and trees, and because 1996 was a great deal like 1995), your analysis might still be driven by outliers.
Full disclosure: I haven't read the paper because it contained a lot of words.
It's the whole world. There's huge variation in lighting by country, and major change over time, considering poor-world growth over that period (not just China, most places.)
I was thinking that if nearly all the change in lighting is in the poor countries, then the inclusion of other countries is clouding findings.
All the countries have some degree of growth. And the poor countries have a mix of varying degrees of autocracy.
21. I'm obviously a bad person but I can't help but think the Z in "MBZ" is "Zakalwe."
(In truth it's Zayed, which is so boring.)
30: And richer countries are now mixing it up better.
Have you tried putting a lime wedge in it?
What the fuck kind of beer needs a mixer?
That's why I've never tried it myself. I like Modelo if I'm drinking Mexican beer.
Fine. Tell them to export here.
OP paper also compares a bunch of different rankings of autocraticness. So the measure won't be perfect, but won't be arbitrary either.
1 appears actually to be the explanation.
The specific components for which we observe an autocracy gradient are also highly informative about governments' ability to manipulate official statistics. The components of investment and government spending have the shared characteristic of being highly dependent on government-reported information. Naturally, the government itself is the primary source of information on government expenditure, while the estimate for investment incorporates sub-estimates for investment by various levels of government and by public enterprises (Lequiller and Blades, 2014). On the other hand, the estimates for private consumption rely to a large extent on sources such as household surveys, which are more difficult to manipulate.Public monies go into official spending stats but not into the local economy.
the results in column 5 indicate that the autocracy gradient is more than twice as large among countries with a history of communism.
[...]
Civilian dictatorships, which have even higher average FWI than presidential democracies, have the largest elasticity, with an implied exaggeration bias of 23%.Also worth noting is the fact that the elasticity is significantly lower for military and royal dictatorships, despite them having even higher average FWI values. One explanation for the observed difference among types of dictatorship is that royal and military dictatorships can deal with the threat of political turnover by means other than manipulation of information. In the case of royal dictatorships, these are mostly oil-rich `rentier' states with low or no taxation and extensive patronage networks
Oh hey, that's nice, they tried three other measures of freedom/autocracy and found the same association in I think all of them. (And also when making them binary variables.)
excess elasticity [between reported GDP growth and lighting growth] at times of low growth more than doubles in the most authoritarian regimes.Which the author assigns to manipulation for publicity, but is also consistent with the embezzlement explanation. Leaner times, more skimming. OTOH,
estimates with the more flexible democracy categories in column 4 show a large and significant increase in the elasticity for the `not free' group in the year before elections. The excess elasticity for this group increases by more than 50% in the year before elections, lending support to the hypothesis that highly authoritarian regimes exaggerate economic performance even more in the run-up to elections.Makes good sense, especially given the size of the spike.
I think Corona can be a good beer on a hot day, but it skunks easily because of the clear glass bottles.
It was, I assure you, a hot day.
Also Dani Rodrik spent a while going into why it was obvious on inspection that Erdogan was manipulating the GDP stats to increase his popularity for a long time. (Or someone he retweeted did, I don't remember, he's my only source for Turkish politics.)
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I just found out that a student of mine passed away. This was someone I liked - he came and sat in on my calculus class a few months ago, just because his friend was in the class, and he worked for the campus mail, so I saw him regularly even though he hasn't been my student for two years.
I hate not knowing how he died and what happened. If it's not available from online sleuthing, is the right thing just to resign yourself to not knowing? I suppose I'm just sad. Should I just assume it's a suicide if no one is saying? I think I'd be able to find it if it were a car crash, and I assume they'd have hinted in the email if it were medical.
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So anyway, the paper appears solid to my stats-illiterate eyes, but appears to me in most cases to be assigning to manipulation what must in large part be explained by bad bookkeeping. It's also intensely boring.
This is wonderfully old school. There are all sorts of ways of estimating GDP or industrial output using proxy measures. They were much more commonly used during the Cold War when there were so many "denied" areas. Using lighting as a proxy is pretty clever and probably suggested by those photos of North and South Korea at night. You can actually see the DMZ. It's where the lights go out.
I looked at the paper. It seemed pretty solid given that no one has invented a reliable freedom-o-meter.
Thanks for the links.
All the countries have some degree of growth, huge variation in lighting by country.