Month: September 2016

Which Countries Should Make the Cut?

Suppose you wanted to teach a schoolchild about the countries of the world, but had to limit yourself to only 54 countries.  Which countries would you pick?  To be sure, everyone will answer this question differently based on where they live, their family’s history, what languages they speak, what sports they follow, and many other factors.  Still, I think it’s fairly safe to say that the U.S., China, and Russia would make almost everyone’s lists.  And other major global powerhouses like Germany, Japan, India, France, the U.K., and Brazil would more often than not make the cut.  Meanwhile, for better or worse, poor Kiribati, Guyana, and the Gambia are usually going to be left out.

I ask this question because my awesome Hindi teacher recently gave me a poster that is typical of those used to teach Indian schoolchildren about the world:flags

It’s interesting to reflect on the choices the poster’s designer made when coming up with his or her 54 picks.  From my perspective, some are inspired, but a few are rather questionable.

For instance, I love that the designer included the U.N. flag!  Also, given that it’s intended for an Indian audience, having India’s neighbors (Afghanistan, Bangladesh, Bhutan, China, Mauritius, Myanmar, Nepal,* Pakistan, and Sri Lanka) is important.  And whether intended or not, it’s a nice touch that three of the countries that were founding members of the Non-Aligned Movement alongside Jawaharlal Nehru’s India are all here: Indonesia, Egypt, and Ghana (R.I.P. Yugoslavia!).

Looking beyond India’s immediate neighbors, though, the situation gets a bit murkier. Europe is arguably over-represented, with 14** countries out of the 54, including very surprising picks like Cyprus and Hungary (but not Spain).  With the exception of Afghanistan, Central Asia is per usual ignored, despite the fact that Tajikistan is  a stone’s throw from Kashmir.  Refreshingly, sub-Saharan Africa is actually relatively well-represented (with 5 or 6 countries, depending on how you count Mauritius), but the picks are kind of odd: Zambia and Ethiopia make the cut, but not Nigeria.

Perhaps the weirdest region of all is the Americas south of Mexico: the only two other Latin American countries listed are Cuba and Panama!!  Where’s Brazil, the world’s fifth largest country by both population and area?  Or Argentina?  At first I thought someone at the Panamanian Embassy in New Delhi had cleverly paid off the city’s educational printers, but a bit of research suggests that there may be more going on here than I first realized.  According to this surprisingly detailed Wikipedia page, one of the largest communities of Indians in the Americas is located in Panama City and traces its origins back to Sikh laborers brought in to help build the Panama Canal.  Apparently relations between the two countries are a flourishing example of South-South cooperation.

Who knows, perhaps there’s similarly cool things underlying some of the other apparently odd choices on this poster.  But I stand by my statement that Hungary really shouldn’t have made the cut, lol…

 

* Nepal has a cool flag!
** Not including Turkey, Russia, or Israel.

GDP Sure Stinks as Our Go-To Measure of Economic Activity

Measuring the size of national economies is hard.  That’s clearly true in the case of developing countries, where underlying economic data is often not available, made-up, or deliberately manipulated.  But even for rich countries it’s difficult to know how to factor in all the different kinds of economic activity humans engage in.  How should the value of multinational corporations be divvied up across the various countries they are present in?  How should public goods provided by the state be valued?  Should you attempt to measure non-market transactions, like the labor traditionally provided by “stay-at-home” mothers?  What about accounting for negative externalities, like the increasing threat of climate change?  What base year should you use?  And how should you deal with (highly variable) exchange rates?  The Economist recently asked if Brexit had helped France’s economy overtake the U.K.’s, and the best it could come up with was a tepid “probably”.

Every now and then methodological changes by national statistical authorities visibly highlight the artificiality of GDP figures. Consider the following few cases:

  • On November 5, 2010, Ghanaians went to bed thinking their country had a GDP per capita of about $753, placing them among the poorest countries in the world.  The next morning they woke up, however, to newspaper accounts proclaiming that the National Statistics Office had changed the base year for calculating GDP from 1993 to 2006, which (along with other methodological changes) had caused the country’s per capita GDP estimate to jump to $1318.  Overnight Ghana had become a solidly middle-income country!  Woohoo!
  • A recent European change in the way the investments of multinational corporations are counted in GDP figures caused Ireland’s GDP to grow by 26% in 2015…  at least on paper.  But, as an economist at University College Dublin tactfully put it, “It’s complete bullshit!”
  • Speaking of bovine shit, India’s 2015 GDP revisions for the first time officially included the value of the “organic manure” that the country’s livestock produce.  Just like that, India’s GDP increased by 9.1 billion rupees (roughly $135 million), but not before some serious academic work had been done calculating the “average evacuation rates” of various species (who says academics never have any fun!).  The Wall Street Journal has a good primer on India’s new GDP figures… and how other “real-world” statistics like the quantity of exports don’t seem to corroborate them much.

Perhaps the solution, then, should be to just get rid of GDP altogether, as more and more people are suggesting.  But then how would the hordes of quantitatively-minded political science Ph.D.s indulge in their favorite pastime of building econometric castles out of data made of sand?