Report: China, Russia, North Korea Lying About the Size of GDP
One University of Chicago researcher took a novel approach in his attempt to determine whether authoritarian nations are honest in reporting their own gross domestic products.
According to a paper recently published by Luis R. Martinez, the amount of light emitted from within a country’s borders after dark can reveal a lot about its prosperity. Conversely, he posited, the same data might also be able to expose the exaggerations of dictators who might not otherwise be held accountable for falsified figures.
In broad terms, Martinez pointed to a disparity between free and oppressed nations in the conversion of nighttime light emission to GDP increases.
Among democratic nations like the U.S. and Canada, each 10 percent increase in the amount of light produced after dark translates to approximately a 2.4 percent uptick in GDP. The corresponding bump is reportedly much higher under authoritarian regimes.
Under the harshest dictatorships, Martinez wrote that the same 10 percent increase in nighttime lights could be reported as up to a 3.4 percent rise in GDP.
Martinez added that his intention was to account for variables that might skew his research results.
“I show that the elasticity of official GDP figures to nighttime lights is systematically larger in more authoritarian regimes,” he wrote. “This autocracy gradient in the night-lights elasticity of GDP cannot be explained by differences in a wide range of factors that may affect the mapping of night lights to GDP, such as economic structure, statistical capacity, rates of urbanization or electrification.”
The highest rates of apparent discrepancy shows up not only among the most authoritarian nations, but in countries with a reason to fudge the numbers, the paper claims.
“The gradient is larger when there is a stronger incentive to exaggerate economic performance (years of low growth, before elections or after becoming ineligible for foreign aid) and is only present for GDP sub-components that rely on government information and have low third-party verification,” the researcher wrote.
The paper cited GDP rates that appear to have been “inflated by a factor of between 1.15 and 1.3 in the most authoritarian regimes.”
His results put the self-reported GDP growth of three nations in particular — China, Russia and North Korea — under the microscope.
Martinez offered some additional context to his report in remarks published by the Washington Post this week.
“These findings indicate that the main result about democracy and autocracy is indeed driven by the differences in political institutions that characterize these regimes,” he wrote.
Martinez described GDP as a figure “prone to manipulation,” since a nation is responsible for compiling its own report. The risk is elevated, he determined, when checks and balances typically found in democracies are missing.
China’s GDP numbers have been the subject of speculation multiple times in recent years. Though it reported a nearly seven-percent rise in the figure last year, the nation has faced allegations of inflated figures in each of the two previous years.
The controversy led to Liaoning Province Governor Chen Qiufa’s acknowledgement last year that some numbers had been falsified between 2011 and 2014, though few additional details were included.
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