Satellite images reveal which countries cheat on their economic statistics

Satellite images reveal which countries cheat on their economic statistics




The temptation is great for government officials to manipulate economic statistics. Foremost among them is gross domestic product, the most commonly used measure of a country’s economy, which often serves as a proxy for a government’s financial stewardship. In a free society, groups like the civil service, media, businesses, and opposition leaders serve as a check on the impulse to flatter GDP figures. In autocratic regimes, there are fewer barriers.

Turns out, there is an easy way to tell if a country’s GDP is being artificially inflated. How easy? Just look at the night sky.

A large body of research shows that the brightness of a country’s nighttime lights, as seen from satellites, is highly correlated with GDP growth. The more money people have, the more likely they are to have lights on at night. Businesses will also stay open later, resulting in even more light.

If autocrats are goosing GDP, then the reported growth in those countries should be higher than nighttime light data would suggest. This is exactly what the University of Chicago political scientist Luis Martinez found. In a recently released working paper, Martinez finds that in countries with similar growth in nighttime brightness, the more autocratic regimes report higher GDP growth. His analysis examined the World Bank’s GDP growth data, Freedom House’s political freedom ratings, and satellite data from the US’s National Oceanic and Atmospheric Administration from 1992 to 2008.

The following chart shows the average growth of nighttime light brightness and GDP for governments that Freedom House designates as “free” and “not free.” Notice that the growth in nighttime light is almost identical, while GDP growth is much larger for countries considered “not free.”

Related posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload CAPTCHA.