In statistics we trust?

Maybe not. Foreign Policy has a fascinating (if alarming) piece on the quality of statistics in Africa. We could expand the analysis to other developing countries as well.

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”).

Looking back, it seems odd that the International Monetary Fund (IMF) and the World Bank would have embarked on growth-oriented reforms without ensuring that governments had the tools to reliably determine whether their economies were growing or stagnating. For statistical offices, structural adjustment meant having to account for more with less: Informal and unrecorded markets were growing at the same time as the same reforms curtailed public spending. As a result, our knowledge about the economic effects of structural adjustment is extremely limited. The cumulative record of annual economic growth between 1960 and today, for African economies does not realistically show what happened with economic development.

Shanta Devarajan, World Bank Chief Economist for Africa, also writes about “Africa’s statistical tragedy.”

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