People, a wise one of you once said, “If it ain’t broke, don’t fix it”.
Sadly it appears that this principle was not followed in the “upgrade” of the PWT to versions 8.0 and 8.1. At least according to this NBER working paper by Pinkovskiy and Sala-I-Martin.
They use satellite measures of nighttime lights as a measure of true income. They assume that these measures are correlated with true income and that the measurement error in the satellite method is uncorrelated with the measurement errors in the PWT methods. They then evaluate different versions of compiled datasets on how well they explain the satellite measure.
They report that, “in particular, we find that the PWT 7.1 chain-based GDP series substantially outperforms the constant-price series in both PWT 8.0 and PWT 8.1, the two most recent vintages of the PWT.”
Perhaps even more surprising, they find that, “the World Development Indicators are as good, and often better, measures of unobserved true income as are any recent vintages of the Penn World Tables.”
One reason for this may be that, “In particular, and again unlike the PWT, the WDI take national growth rates directly from the national accounts without any further editing, while the PWT performs some editing of the growth rates before using them.”
The paper also has a fascinating discussion of what approaches are better for measuring cross-country income differences versus producing comparable measures of country growth rates, along with a discussion on possibly average different measures in a way to produce an overall more accurate estimate.
Susan Thomson, an assistant professor of Peace and Conflict Studies at Colgate University had an interesting article recently about Rwanda. The piece was originally published in the Conversation and re-published by the Huffington Post as “Democracy Rwanda Style: You Can Have any President You Want, As Long as Its Paul Kagame.” While the main gist of the article didn’t come as any surprise, there was one nugget in the article that I found intriguing. Thomson writes:
“Kagame devotees are quick to point out the country’s economic successes, using reports produced by the Rwandan government itself to back up their claims. In recent years, the World Bank has indeed found Rwanda to be among the easiest countries in Africa in which to do business. But in 2006, when the same World Bank found data that did not support the narrative of economic growth in Rwanda, that data was destroyed and the foreign researchers were expelled. Since then everything from the World Bank on Rwanda has been positive. Suppressing dissent knows no bounds.”
She links to a paper by Bert Ingelaere called “Do We Understand Life after Genocide? Center and Periphery in the Construction of Knowledge in Postgenocide Rwanda.” It’s a fascinating paper and work checking out in full, but here are some of the parts that I found noteworthy.
a. There is a Potemkin village aspect to Rwanda where the state carefully manages how much access researchers have to villagers as well as the villagers behavior and thoughts (at least the ones that are voiced) about progress. One anecdote involves the government trying to make villagers look less poor by wearing shoes. Ingelaere writes:
“Not wearing shoes means exclusion from public places such as markets and being turned away from official government functions. Yet peasants often do not have the financial means to adhere to this rule, and sometimes end up in the local cachot (jail) as a result. Obligatory fines of 10,000 Rwandan francs are not adjusted to the circumstances of rural life, and thus the only strategy for regaining freedom is to borrow money from family and friends, resulting in debt and more poverty.
Another strategy is to follow the spirit, if not the letter, of the policy and participate in the project of image control. During fieldwork we noticed men and women walking to official gatherings and carrying their shoes on their heads. The purchase of new shoes as required by official policy had represented a serious investment, and these possessions had to be handled with care. Only when approaching the area where government officials were located (sometimes in the company of foreign visiters inspecting a “project” or some other “developmental” initiative) would they put on their shoes. Then, after the meeting and out of sight of the eyes of the state and the foreigners, the shoes would be removed and placed back on the head.”
b. The story on the World Bank data is a bit more complicated. Rwanda was to make up one of many countries that the Bank was studying to chart Amartya Sen’s “expansion of freedoms,” where development is measured by more than just income, including things like “the exercise of basic rights, and the success or failure of democratic institutions in different countries.” You can tell from that quote that the Rwandan government was not going to be pleased with the results.
After six months of surveying Rwandans, the government put a stop to the study: “The Rwandan security forces seized at least half of the data on the pretext that ‘genocide ideology’ lurked in the research design and study content. Rwandan participants were questioned by the police, and foreign researchers implementing the study were summoned by the Criminal Investigations Department (CID). After a long period of negotiation between high-level World Bank representatives and several Rwandan ministers and other government officials, the decision was taken to destroy all the data and abandon the research project altogether.”
Alrighty then…I guess the Bank got the message.
When Kevin and I first moved to Mexico City, we were amazed by the wide variety of goods that were hawked at traffic stops. Not just the variety but the fact that a lot of them seemed wildly inappropriate for the situation, like the guy selling 6 foot hat racks at a busy roundabout on a major thoroughfare. That was nothing compared to the gigantic satellite dish we saw hawked at a 4 way stop in Tunisia. It must have weighed many hundreds of pounds.
I was reminded of this when I read Bill Browden’s excellent book Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice. Browder was struggling to find information on companies in a country that seemed at first glance to be highly un-transparent. He learns though that the legacy of Soviet bureaucratism has a few upsides:
“Because of Soviet central planning, Moscow needed data on every single facet of life so its bureaucrats could decide on everything from how many eggs were needed in Krasnoyarsk to how much electricity was needed in Vladivostok. The fact that the Soviet regime had fallen hadn’t changed anything—Moscow ministries continued to exist, and their bureaucracies took great pains to account for everything for which they were responsible.”
In the fall of the Soviet Union, that data still existed, it was just a matter of accessing it. And lo and behold, he finds one such source of data at a traffic stop in downtown Moscow.
“While Vadim sat there that day, a boy approached the car brandishing his wares. Vadim wasn’t interested, but the boy persisted. “All right, what are you selling?” Vadim asked warily. The boy held open his dirty blue parka to reveal a collection of CD-ROMs in a plastic portfolio. “I’ve got databases.” Vadim’s ears perked up. “What kind of databases?”
“All kinds. Mobile phone directories, tax return records, traffic violations, pension fund info, you name it.” Vadim spotted one entitled “Moscow Registration Chamber Database.” Vadim did a double take. The Moscow Registration Chamber is the organization that tracks and collects information about who owns all Moscow-based companies.”
Now that’s serendipity! It’s also the most unique way I’ve heard of to come across a useful dataset.
“Oh China, you are not a clean energy powerhouse, are you.”
“LOL no Angus we are not. We’ve been burning the shit out of some coal lately.”
People, check out this graph comparing China’s previously reported coal use and its currently reported coal use:
“Illustrating the scale of the revision, the new figures add about 600 million tons to China’s coal consumption in 2012 — an amount equivalent to more than 70 percent of the total coal used annually by the United States.”
Who knows people, maybe someday, they’ll release accurate GDP statistics too!
Just discovered and his incredible data visualizations. Here’s one showing how democracy, autocracy and colonialism has changed over the last 100 years:
(note: The figure doesn’t scale very clearly; here’s a link to a Washington Post article about it with much larger and clearer graphic.)
It’s amazing what a small percentage of the world’s population lived in a democracy in 1900 (around 10%). Thankfully that number climbed significantly over the century.
*except for the small percentage listed as “no data”! The “no data” category disappeared around mid-century and is making a comeback. I’m curious what “no data” means and why it’s on the rise. Would Yemen qualify?