There are many countries which lack regular reporting of basic economic data. In many African countries, for example, annual GDP reports are calculated using base year estimates and an annual multiplier adjustment calculated from a few key indicators. The problem is that the further we move from the base year, the mess accurate the economic measures become. Indeed, the problem was so pronounced in Nigeria that a 2012 revision added nearly $100 billion to the national economy overnight, increasing the size of the economy by 40%. The revision was not based on any real change in the country’s economic output—it was certainly not a function of a dramatic level of economic growth. Rather, it was simply a recalculation of the figure based on more up-to-date (and arguably more accurate) data. In 2010, Ghana similarly experienced a 60 percent increase in its GDP.
So does all this matter? Should we worry about the accuracy of GDP figures in the United States? Or unemployment figures, which would be similarly affected by the proposal? Leave a comment below and let us know what you think.
From the video: “The single story creates stereotypes, and the problem with stereotypes is not that they are untrue, but that they are incomplete. They make one story become the only story…Stories matter. Many stories matter. Stories have been used to dispossess and to malign, but stories can also be used to empower and to humanize. Stories can break the dignity of a people, but stories can also repair that broken dignity.”
Nelson Mandela was a fan of Chinua Achebe’s (left) work, having said that while reading Achebe’s novels as a prisoner of Robbin Island for 27 years, “prison walls fell down.” Mandela also said that Achebe’s work, “brought Africa to the rest of the world.”
Nigerian author and poet Chinua Achebe died on Friday. He was 82. Achebe’s work centered on understanding the effects of colonialism and corruption in Africa. His first—and most famous—book was Things Fall Apart. Published in 1958, the classic text analyzed the clash between African and British colonial values in Nigeria, seeking to understand how local norms and values were undermined by colonialism.
In the book, Obierika comments that, “The white man is very clever. He came quietly and peaceably with his religion. We were amused at his foolishness and allowed him to stay. Now he has won our brothers, and our clan can no longer act like one. He has put a knife on the things that held us together and we have fallen apart.”
Although Achebe was never awarded the Nobel Prize for Literature, he was regularly held in the pantheon of the best African writers, including Wole Soyinka, Ngugi wa Thiong’o, and Lewis Nkosi. Achebe also served as a role model for countless younger African authors.
His passing was indeed a tragedy. But it also provided me pause. I had regularly used fiction, most notably Achebe’s Things Fall Apart (Nigeria), but also other works such as Tsitsi Dangarembga’s Nervous Conditions (Zimbabwe), Soyinka’s The Lion and the Jewel (Nigeria), Chukwuemeka Ike’s Bottled Leopard (Nigeria), and Gillian Slovo’s Red Dust (South Africa), among others, as part of my introductory comparative politics course. Finding myself constantly trying to fit additional materials into the course, I stopped using novels in favor of other (nonfiction) readings covering key themes and debates.
Yet increasingly I suspect that fiction should have a more central place in the class again. Good fiction provides students with an additional avenue to make sense of the issues faced in regions and societies far removed from their own. While a well-written journal article or textbook chapter can covey all the factual information students need, the more emotive, visceral, and evocative learning atmosphere created through fiction speaks to students in a different way. Students, in short, get a better “feel” for the places they are studying.
I’ve provided a few recommendations for books covering several African countries above. I’d welcome recommendations for some of the other regions we typically cover in an intro to comparative politics course. Leave your suggestions below. And thanks!
According to a report by Reuters, Nigeria’s gross domestic product will grow by 40 percent in the second quarter of 2012. If correct, Nigeria’s GDP would increase from $273 billion to $370 billion, and Nigeria would become Africa’s second largest economy in Africa. Growth forecasts suggest that Nigeria would surpass South Africa to become Africa’s largest economy within a few years.
The move has significant implications for Nigeria and the rest of the developing world. Symbolically, Nigeria’s newfound economic prowess could afford the country greater leadership and influence on the continent, particularly within West Africa.
Nigeria’s larger economy would also have important policy effects for international institutions. By increasing its GDP, Nigeria’s debt ratio (the size of the country’s national debt as a proportion of the total size of its economy) will nearly be cut in half. At the same time, the improved economic status of the country could affect its ability to secure concessionary loans. When Ghana’s GDP was increased by more than 60 percent in 2010, its debt-to-GDP ratio fell from 40% to 24% and the World Bank reclassified it from a low income to a lower-middle income country.
So how did Nigeria and Ghana grow their economies so dramatically? In truth, they didn’t. Gross domestic product is the total value of goods and services produced win a country in a given year. But in most countries in most years, economists don’t actually go out and add everything up. Instead, they start with a year in which a fairly accurate survey was conducted and adjust it annually based on other variables like population growth. In both Ghana and Nigeria, the dramatic increase in GDP was not the result of sudden and dramatic economic growth. Rather, in both cases, the upward shift in GDP was the result of how the number was calculated and which base year was used.
This methodology raises several important questions.
First, how accurate is the baseline year? If the baseline year is incorrect, then all subsequent calculations based on that initial estimate also be inaccurate. The exclusion of the informal sector, which can include everything from sales by unlicensed street vendors to prostitution to the sale and trafficking of illicit drugs, often leads GDP to be underestimated. A 2010 World Bank report estimated the size of the informal economy in the United States as 8.8 percent of the formal economy. The median figure for developing countries was 41 percent. In the countries with the largest informal economies (such as Azerbaijan, Bolivia, Georgia, and Panama), it exceeded 60 percent.
Second, how old is the baseline year? When Ghana’s GDP increased in 2010, it was because Ghana shifted its baseline year from 1993 to 2006. Similarly, Nigeria’s baseline year shift from 1990 to 2008 will likely account for a significant portion of the increase in its GDP. Think for a moment about the importance of the baseline year. In the early 1990s, the cell phones which are no so ubiquitous across Africa will still in their infancy, widely unavailable on the continent. This one example illustrates how dramatically the structure of an economy (and a society) can shift in a relatively short period of time.
This means that GDP figures for developing countries are best thought of as general estimates falling within a wide margin of error rather than concrete numbers that reflect real, on the ground economic activity. It teaches us that we should be critical consumers of data.
What do you think? Should we continue to use GDP as a proxy measure for development? If so, how can we acknowledge the limits of that figure while making meaningful decisions? If not, what do we use instead? Leave a comment below and let us know what you think.
Scotland’s First Minister Alex Salmond (left) and British Prime Minister David Cameron (right) sign an agreement to hold a referendum on Scottish independence in 2014.
Earlier this week, the British and Scottish governments reached an historic agreement that would see Scotland hold a referendum asking voters to decide whether Scotland would become an independent country or remain as part of the United Kingdom. Numerous issues are at stake, not least of which is control of the estimated 20 billion barrels of oil and natural gas located under the North Sea.
There is good reason to think that British Prime Minister David Cameron is making a strong political move. While the Scottish National Party has polled well in recent elections, the idea of Scottish independence is much less popular than the party which supports it. A recent poll found that only 34 percent of Scottish voters supported independence, while more than half believed Scotland’s economy would suffer if it declared independence.
The move towards a referendum on Scottish independence raises one of the classic challenges of global politics: the problem of national sovereignty. The idea of national sovereignty links the concepts of state (the physical territory) and nation (the people who inhabit that territory and share a common sense of belonging). Within a country, the idea of legitimacy links the people and the state through the concept of sovereignty. The right of the state to exercise power, according to political thought since the Enlightenment, is rooted in the social contract. Since the end of World War II, and particularly since the end of the Cold War, the legitimacy of nondemocratic states has been strongly questioned.
The problem, of course, is at what level such popular consent takes place. The historical patterns of development has resulted in international legal boundaries between states which rarely correlate neatly with the common identity of those who inhabit those states. Indeed, it is relatively rare for the geographic boundaries of the political entity of the state and the cultural/ethnic entity of the nation to correlate much at all. Yet the tidy nation-state represents the ideal type of international relations.
Far more common are multinational states, countries in which multiple nations often compete for control of the state. Nigeria is perhaps the most well-known example. There, more than 250 ethnic groups—the three largest of which comprise about two-thirds of the population—compete for power. One of the most important legacies of colonialism in Africa was the creation of lasting political boundaries that bare little correlation to the politics on the ground, often undermining the sovereignty and legitimacy of the post-colonial state.
The status of the United Kingdom is similarly complicated by its history. There, four distinct “countries” are united. England, Scotland, Wales, and Northern Ireland exist as “countries within a country.” Over the past twenty years, political authority has increasingly devolved from the unitary state. Political power has been decentralized away from London and towards regional governments. Independence in Scotland would represent a dramatic culmination of that (admittedly much slower) historical trend.
And other groups might be watching. Around the world, there are countless groups who identify themselves as stateless nations. The Palestinians are perhaps the most well-known, but others include the Basques in Spain, the Tamils in Sri Lanka, the Uighurs in China, the Hmong in Southeast Asia, and the Kurds in Iraq and Turkey
What do you think: Should Scotland declare independence? What would the political, economic, and social implications of such a move likely be? And how would Scottish independence affect the claims of other nationalist groups seeking independence, such as the Basques, Tamils, or Kurds? Take the poll below or leave a comment and let us know what you think.
Thursday’s poll will pit incumbent President Hamid Karzai against former foreign minister Abdullah Abdullah. Although many observers believed Karzai’s campaign enjoyed an insurmountable advantage, Abdullah’s campaign has managed to close the gap, and some are now forecasting the need for a run-off election in October. A runoff would be necessary if neither candidate manages to secure an absolute majority of the vote.
2. Palestinian authorities in Gaza engaged in a series of small battles against Jund Ansar Allah, on Friday. The shootouts resulted in at least 13 deaths and dozens wounded. The battles represented the latest—and perhaps most serious—challenge to the Hamas-led government in Gaza. Jund Ansar Allah is one of several small extremist groups pushing for the introduction of strict Sharia law in Gaza. Jund Ansar Allah, which claims ties to al-Qaeda, had labeled Gaza an Islamic emirate subject to theocratic law, a claim which Hamas rejects. For its part, the Hamas government has dismissed challenges to its leadership as “Zionist propaganda” sponsored by the Israeli government.
1. Two statements by the Indian government last week dashed hopes of progress in multilateral negotiations. On Wednesday, India’s commerce secretary, Rahul Khullar, dismissed hopes of rekindling World Trade Organization talks as unrealistic in the current global political and economic climate. The current round of talks, referred to as the Doha agenda, has been under negotiation for nine years. The talks have been suspended numerous times, largely as a result of the inability of WTO member states to agree on binding cuts to agricultural subsidies. According to Khullar, progress is unlikely because, in the context of the global economic crisis, political leaders are focused on job losses and the lack of domestic economic growth, a focus which makes it difficult to move forward on a new global trade deal.
In another development, India’s environment minister, Jairam Ramesh, said on Friday that India would not agree to binding emission cuts for at least ten years, potentially throwing climate talks scheduled to take place in Copenhagen in December into disarray. India and China are both dismissive of western pressure to agree to greenhouse gas reductions, believing that such reductions would undermine future economic growth and development in their countries. But without the participation of China and India in climate change negotiations, progress will be far more difficult, particularly given the historical U.S. negotiating position that it will not be bound by any climate change agreement that does not also include reductions for China and India.
2. Over the weekend, Russia concluded negotiations to expand the Russian troop presence in Kyrgyzstan. The expanded Russian presence is part of Russia’s broader effort to reassert itself in its traditional sphere of influence, an effort which included the development of the Collective Security Treaty Organization, a counterpart to NATO which includes Russia and six other former Soviet Republics, Kyrgyzstan, Kazakhstan, Tajikistan, Uzbekistan, Armenia and Belarus. The United States and Russia have been competing for influence in Kyrgyzstan, which occupies an important geo-strategic position, and Kyrgyzstan’s president, Kurmanbek Bakiyev, has skillfully negotiated between competing Russian and American interests. In February, after receiving $2 billion in aid from the Russian government, Bakiyev ordered the United States to leave Kyrgyzstani bases by June. The bases are part of the U.S. air transit route to supply forces in Afghanistan. After the United States agreed to triple rent payments for use of the base and to offer additional financial assistance to the Kyrgyzstani government, Bakiyev rescinded his request that the U.S. withdraw.
3. Venezuelan President Hugo Chávez has once again sparked widespread criticism, this time among human rights groups. At issue is the latest development in the president’s campaign against “media terrorism”—a new law which would punish journalists and their sources with up to four years in jail for “causing panic,” “disturbing social peace” or compromising national security.
There are signs of stabilisation in our economies, including a recovery of stock markets, a decline in interest rate spreads, improved business and consumer confidence, but the situation remains uncertain and significant risks remain to economic and financial stability.