Lies, Damn Lies, and Statistics

The efficacy of the Millennium Development Goals, or MDGs, was a point of discussion for this week’s ICT4D course.  The case was made that the impetus for the MDGs was an end in and of itself for the simple fact that, regardless of the final status of the goals, the process of measuring progress (and in some cases, the lack thereof) created resources, networks, and for the first time coalesced a wealth of statistical information that the world simply lacked prior to the launch of the MDGs.

While this is a rewarding byproduct of the MDGs, a recent article I came across in Foreign Policy raised doubts to even this saving grace.  The article “We Have No Idea if Africa Is Rising” by Morten Jerven shifted the debate from whether or not Africa is in fact economically rising to simply questioning the validity of the supposed statistics on which we base our analyses.

As the article begins, Jerven asserts the following :

Some commentators argue that African economies are destined to remain trapped in the bottom billion unless some sort of fundamental change occurs. Others beg to differ, speaking of a continent that’s showing every indication of rapid progress. Yet, despite their wildly different interpretations, what’s striking is that both camps base their arguments on the same set of numbers.

The crux of Jerven’s argument seems to rely on the recent phenomena of “GDP revisions” in African countries. As he cites:

In November 2010, the statistics office of the government in Ghana announced that it was revising its GDP estimates upwards by over 60 percent, suggesting that previous estimates had left out economic activities worth about $13 billion. After the revision a range of new activities were accounted for, and as a result Ghana was suddenly upgraded from a low-income country to a (lower) middle-income country. In the fall of 2011 Nigeria also announced an upward revision of its GDP. This revision isn’t complete yet, but once it is it’s likely to cause a similarly large jump in growth figures. Several observers have raised the possibility that such a revision could actually double Nigeria’s GDP — which, given the size of Nigeria’s economy, would bump up the size of Sub-Saharan Africa’s economy by more than 15 percent. Just to give some perspective: The value of the increase would be roughly equivalent to 40 Malawi­sized economies.

According to Jensen, the agencies that oversee much of the statistical evidence the International Development field basses its assessments on, such as the World Bank, have began to question many previously held beliefs about African trends and, most worrying, have replaced their projects with clouds of confusion and doubt.  To say the least, the World Bank’s chief economist for Africa has referred to this recent perceptual shift as “Africa’s Statistical Tragedy.”

Jerven also contends that this is nothing new for Africa.  As a scholar who has written books that take an in-depth look into the methods used by governments and organizations to collect data in Africa, Jerven has found a common thread of diminishing statistical quality since independence for the African nations.  As he writes:

Upon achieving statehood, African states moved to expand their statistical capacity. They performed population censuses, business surveys, and agricultural censuses. But their ability to do this was hit hard by the economic crisis of the 1970s. The administrations faced large external imbalances, high rates of inflation and general shortage of funds which weakened government bureaucracies around the region, leaving many of them unable to measure their economies. Moreover, the statistical offices fell into further neglect during liberal policy reform that followed the economic crisis in the 1980s and 1990s (the period of “structural adjustment”).

On the subject of ICT4D, these revisions and “new methods are capturing a whole range of fresh numbers, such as data from telecommunications (mobile phones) and the service sector.”  What’s more:

[A] great part of the recent growth derives from appropriately recorded growth in external trade, but exactly how this growth relates to the domestic economy, and to economic development more generally (including poverty reduction), remains pure speculation.

Some scholars have suggested looking at alternative measures. We could, for example, compile new estimates based on the ownership of goods such as television sets, fridges, and automobiles — which imply that African economies have been growing three times faster than the official figures.

In short, we simply don’t know how Africa is doing.  Really, the whole article is well worth the read for those in International Development and should give pause to how much weight we attribute to the next statistical report out of Africa.

MB

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