Comparability of GDP Estimates in Sub-Saharan Africa: The Effect of Revisions in Sources and Methods Since Structural Adjustment, Review of Income and Wealth. Early view. Article first published online: 6 DEC 2012
Review of Income and Wealth, 59 pp. S16-S36
The unreliability of African income estimates was highlighted when Ghana announced that GDP estimates were revised upwards by 60.3 percent in November 2010. Similar revisions are to be expected in other countries. Many statistical offices are currently using outdated base years. It is argued that with the current uneven application of methods and poor availability of data, any ranking of countries according to GDP levels is misleading. The paper emphasizes the challenges for “data users” in light of these revisions. GDP data are disseminated through international organizations, but without any detailed data descriptions. It is argued that many statistical offices in Sub-Saharan Africa struggled to recover from the structural adjustment period, and the offices have not had the capacity to handle other challenges such as providing data to monitor the Millennium Development Goals. Currently, neither data users nor data producers are getting the assistance they need.
African Affairs, 112 (446) pp. 138-147
On 5 November 2010 Ghana Statistical Services announced that it was revising the GDP estimates upwards by over 60 percent, suggesting that in previous GDP estimates economic activities worth about US$13 billion had been missed. 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 a forthcoming upward revision of its GDP. Without presenting the public with any facts or figures, nor a date for the revision, it was announced by the director of the Nigerian Bureau of Statistics that Nigeria soon would join Ghana in escaping poverty according to official statistics.
Morten Jerven and Magnus Ebo Duncan
African Statistical Journal, 15 pp. 13-24
The upward revision of GDP in Ghana, announced in November 2010, attracted considerable attention in the media, in the development community, and from development scholars. This paper clarifies what caused this upward revision and discusses how the revision was handled. Many other countries have outdated base years and do not utilize data sources fully. They can learn from the Ghanaian experience and improve the accuracy of the most important metric for macroeconomic evaluations. This paper also offers a perspective on how the media and popular opinions are best managed in a careful and transparent process.
An Unlevel Playing Field: National Income Estimates and Reciprocal Comparison in Global Economic History
Journal of Global History, 7 (1) pp. 107-128
If we take recent income per capita estimates at face value, they imply that the average medieval European was at least five times ‘better off’ than the average Congolese today. This raises important questions regarding the meaning and applicability of national income estimates throughout time and space, and their use in the analysis of global economic history over the long term. This article asks whether national income estimates have a historical and geographical specificity that renders the ‘data’ increasingly unsuitable and misleading when assessed outside a specific time and place. Taking the concept of ‘reciprocal comparison’ as a starting point, it further questions whether national income estimates make sense in pre-and post-industrial societies, in decentralized societies, and in polities outside the temperate zone. One of the major challenges in global history is Eurocentrism. Resisting the temptation to compare the world according to the most conventional development measure might be a recommended step in overcoming this bias.
Economic History of Developing Regions, 26 (2) pp. 111-124
This review article examines the differences in the approaches taken by economists and historians when interpreting social and economic change in the African past. It is argued that it is a mistake to assume that one discipline has supremacy over the other, let alone monopoly, when it comes to evaluating historical causes of African poverty. One of the shortcomings of the ‘New African Economic History’ is that it has largely sidestepped the issue of data quality. In cross-disciplinary work it is generally advised that data points and observations should roughly cohere with the state of knowledge in the other disciplines. Economists do themselves a disservice if the only criteria they consider for ‘robustness’ of historical arguments are those pertaining to econometric methods.
African Affairs, 110 (439) pp. 169-190
This article traces how African incomes have been measured through history, and shows that there has been a conflict of aims between producers and users of national income estimates. Politicians and international organizations seek income measures that reflect current political and economic priorities and achievements. Thus the importance given to markets, the state, and peasants in the estimates varies through time and space. Meanwhile statisticians aim to produce a measure that gives the best possible reflection of the economy given the available data and definitions at any time. Scholars prefer a measure that is consistent through time and space so that ‘progress’ can be measured, compared, and analysed, while not being able to reach consensus on how ‘progress’ is best calculated or defined. The result is not an objective measure of progress, but rather an expression of development priorities determined by changes in the political economy. The article provides a much-needed study of the ability of the statistical offices to provide income statistics independently and regularly. These data are of crucial importance as they enter the public domain in policy evaluations, political debates, and progress towards lofty aims such as the Millennium Development Goals.
Journal of International Development, 23 (2) pp. 288-307
Cross-sectional studies of growth in post-colonial Africa have overwhelmingly focused on explaining the failure of growth in Africa. This prompting stylised fact has its qualifications and when these are taken into consideration the explanations of African economic growth appear incoherent. The notion of a chronic African growth failure has diverted attention from the process of economic growth and left important questions unaddressed. The quest for the African dummy has delivered transferable conclusions with a strong impact on the writing of African economic history. This critical survey of the literature argues that African economic performance needs to be evaluated from a different perspective.
Journal of African Economies, 20 (3) pp. 377-394
Statistics on African economic growth are widely known to be inaccurate, but the extent and nature of these inaccuracies and their implications for the users of the data have not been rigorously assessed. This article investigates measurement issues of economic growth in post-colonial Tanzania. It is shown here that conclusions on Tanzania's development performance are conditioned by selection of the source of growth evidence. The article argues for an agnostic perspective on Tanzanian economic growth. Modelling efforts of African growth are more sophisticated than the quality of the data justifies. The policy implications are clear. For producers, there needs to be stronger investment into data collection in African economies, and for users, greater caution utilised in quantitative macro studies.
Journal of Eastern African Studies, 5 (1) pp. 2-23
For a long time Kenya was the African exception a country that embraced a capitalist path to development in the midst of widespread state-led development. More recently it has been used as one of many examples of neopatrimonial rule in Africa, following its reputation for endemic corruption and its failure to successfully embrace economic and political reforms. Most interpretations of Kenya’s economic development record rest heavily on the evidence of growth. This article revisits that evidence, and the associated causal claims, and finds little support for the consensus view. In the 1960s and 1970s there was nothing exceptional about economic growth in Kenya, while in the 1980s and 1990s Kenya performed relatively well if external conditions are taken into consideration. Finally, the article questions whether this finding should compel scholars to re- evaluate the relative merits of the Kenyatta and Moi regimes.
Morten Jerven, Béatrice Hibou, Boris Samuel and Rozenn Diallo
Politique africaine, 4 pp. 29-42
Interview with Boris Samuel and Béatrice Hibou (in French) about my research on national accounting in African and the economic growth data.
World Economics, 12 (4) pp. 35-52
What do the statistics from the international databases tell us about income and growth in Sub-Saharan Africa? Less than we would like to think. The article takes a starting point in per capita GDP estimates in Africa. Recently, Ghana announced a revision of its GDP statistics, increasing its national income estimates by over 60%. This article shows that similar revisions are to be expected in other countries. Many statistical offices are currently using outdated data and methods. It is argued that with the current uneven application of methods and poor availability of data, any ranking of African economies according to GDP levels is misleading. It is argued that the World Bank, prominent among data disseminators, is currently not providing the necessary information to complement its datasets, and that this shortcoming misleads data users.
Economic History of Developing Regions, 25 (2) pp. 127-154
Africa has not suffered a chronic failure of growth. In fact, Africa has experienced recurring periods of growth, and this paper reviews some of these growth “spurts” to substantiate that claim. The immediate cause of low income in Africa is that these “spurts” have always been followed by a “bust”. This is a significant reorientation of the central research question – away from a search for the root causes of Africa’s underdevelopment and towards explaining the causes and effects of growth and decline. The growth spurts are approached as local responses to the global demand for African produced commodities. In this paper, I shall argue that these supply responses involved more than a reallocation of land and labour; they entailed investment and required institutional change. It is precisely because these periods of rapid economic change and accumulation caused significant qualitative changes in how society and the economy were organized that they cannot be ignored – as they have tended to be in the search for a root cause of Africa’s chronic failure to achieve growth.
Journal of Southern African Studies, 36 (1) pp. 73-94
Botswana has figured widely as the exceptional African growth success story and has been frequently cited in scholarship that supports the view that African and other less developed economies are capable of rapid economic growth as long as the internal institutional framework and development policies are right. A shortcoming of the literature on African economic performance to date is that it has focused on the aggregate average growth rate, and has not taken the quality of the growth evidence into consideration. This article makes use of the official growth evidence taken from the published national accounts in Botswana to establish that there is reason to doubt the accuracy of the growth evidence on Botswana. It shows how the first decade of growth in particular is seriously biased upwards. After the official evidence and the national accounting methodologies have been analysed, several revisions of the African growth miracle become necessary. The ‘policy’ accounts have largely been informed by observing the recorded aggregate growth rate and have attributed the rapid growth to stylised facts about policies and institutions. A consideration of disaggregated growth rates allows a discussion of the causal coherence of the dominant explanations of rapid growth in Botswana, in particular, and in the divergent fortunes in the developing world, in general. This article argues that the growth miracle can only directly be attributed to economic policy if ‘good policy’ is defined as the absence of very bad policies.
Random Growth in Africa? Lessons from an Evaluation of the Growth Evidence on Botswana, Kenya, Tanzania and Zambia, 1965–1995
The Journal of Development Studies, 46 (2) pp. 274-294
Given shortcomings in basic data collection and insufficient resources in preparing official statistics African growth data are unlikely to be very reliable. Estimates of an annual growth rate of 3 per cent may be consistent with a reality between 0 and 6 per cent growth. Although data from international databases are widely used in an expanding literature on African growth there has been no research into how serious these data inaccuracies are. This paper addresses the reliability of the available growth evidence for a selection of countries and offers concrete measures of inaccuracies. It examines the reasons for discrepancies and shows that they can be quite large.
African Affairs, 109 (434) pp. 77-96
It has been argued that the fundamental cause of Africa’s current relative poverty is a lack of pro-growth institutions deriving either from the colonial system, the period of slavery, or from geographic or population characteristics. This article takes a fresh look at estimates of African country incomes. It subjects the available datasets to tests of accuracy, reliability, and volatility, and finds that there is very little to explain in terms of diversity of income between countries. With the exception of some resource-rich enclaves, a few island states, and South Africa, the income of one African economy is not meaningfully different from another. It is found that the majority of African countries should for all practical purposes be considered to have the same income level. The article therefore concludes that it is futile to use GDP estimates to prove a link between income today and existence of pro-growth institutions in the past, and recommends a searching reconsideration of the almost exclusive use of GDP as a measure of relative development.
Links to Additional Papers Online
- “African Growth Recurring: An Economic History Perspective on African Growth. Episodes, 1690-2010.” Simons Papers in Security and Development, No. 4/2010, School for International Studies, Simon Fraser University, Vancouver, June 2010.
- “Users and Producers of African Income: Measuring African Progress”, Simons Papers in Security and Development, No. 7/2010, School for International Studies, Simon Fraser University, Vancouver, June 2010.
- “Comparing colonial and post-colonial output: Challenges in estimating African economic change in the long run”, Center of Global Economic History Working Paper Series, No. 10, Utrecht University, June 2011.
- “The Political Economy of Fertilizer Subsidies and Agricultural Output Data: Evidence from India, Nigeria and Malawi”, Simons Papers in Security and Development, No. 18/2012, School for International Studies, Simon Fraser University, Vancouver, March 2012.
- “Prospects for Growth in Africa: Learning from Patterns of Long-Term Economic Change” prepared for the launch of the LSE IDEAS Africa International Affairs Programme, March 2010 published in Strategic Update 4.
- Social Capital as a Determinant of Economic Growth in Africa: a Review Article