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How Much Should We Trust the Dictator’s GDP Growth Estimates?

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  • Luis R. Martínez

Abstract

I study the overstatement of economic growth in autocracies by comparing self-reported GDP figures to night-time light recorded by satellites from outer space. I show that the night-time-light elasticity of GDP is larger in authoritarian regimes, even accounting for differences in multiple country characteristics. This autocracy gradient in the elasticity is greater when the incentive to exaggerate economic growth is stronger or when the constraints on exaggeration are weaker. The results suggest that autocracies overstate yearly GDP growth by approximately 35%. Adjusting the data for manipulation leads to a more nuanced view on the recent economic success of autocracies.

Suggested Citation

  • Luis R. Martínez, 2022. "How Much Should We Trust the Dictator’s GDP Growth Estimates?," Journal of Political Economy, University of Chicago Press, vol. 130(10), pages 2731-2769.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/720458
    DOI: 10.1086/720458
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    Cited by:

    1. Cipullo, Davide & Reslow, André, 2022. "Electoral cycles in macroeconomic forecasts," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 307-340.
    2. Grossman, Gene M. & Helpman, Elhanan, 2023. "Electoral competition with fake news," European Journal of Political Economy, Elsevier, vol. 77(C).
    3. Parrendah Adwoa Kpeli & Günther G. Schulze & Nikita Zakharov, 2024. "Elections and (mis)reporting of COVID-19 mortality," Discussion Paper Series 48 JEL Classification: D7, Department of International Economic Policy, University of Freiburg, revised Apr 2024.
    4. Fetzer, Thiemo & Yotzov, Ivan, 2023. "(How) Do electoral surprises drive business cycles? Evidence from a new dataset," CAGE Online Working Paper Series 672, Competitive Advantage in the Global Economy (CAGE).
    5. Liu, Honglin & Liu, Qiao & Liu, Yufei, 2023. "The world price of macro opacity: Through the lens of nighttime satellites," Economics Letters, Elsevier, vol. 228(C).
    6. Chuantao Cui & Leona Shao-Zhi Li, 2024. "More but not better: Career incentives of local leaders and entrepreneurial entry in China," Working Papers 202417, University of Macau, Faculty of Business Administration.
    7. Diep Hoang Phan, 2023. "Lights and GDP relationship: What does the computer tell us?," Empirical Economics, Springer, vol. 65(3), pages 1215-1252, September.
    8. Yit Wey Liew & Muhammad Habibur Rahman & Audrey Kim Lan Siah, 2023. "Rail Stations To Development: Evidence From Colonial Malaya," Department of Economics Working Papers 2023_01, Durham University, Department of Economics.
    9. Daniel Freund & Samuel B. Hopkins, 2023. "Towards Practical Robustness Auditing for Linear Regression," Papers 2307.16315, arXiv.org.
    10. Briviba, Andre & Frey, Bruno & Moser, Louis & Bieri, Sandro, 2024. "Governments manipulate official Statistics: Institutions matter," European Journal of Political Economy, Elsevier, vol. 82(C).
    11. Sundar Ponnusamy & Mohammad Abbas Hakeem, 2024. "Ethnic inequality and public health," Health Economics, John Wiley & Sons, Ltd., vol. 33(1), pages 41-58, January.
    12. Mengjiao Wang & Xiaofang Xu & Liyuan Zheng & Xiaolu Xu & Yukuo Zhang, 2023. "Analysis of the Relationship between Economic Development and Water Resources–Ecological Management Capacity in China Based on Nighttime Lighting Data," IJERPH, MDPI, vol. 20(3), pages 1-19, January.
    13. Dang,Hai-Anh H. & Pullinger,John James & Serajuddin,Umar & Stacy,Brian William, 2024. "Reviewing Assessment Tools for Measuring Country Statistical Capacity," Policy Research Working Paper Series 10717, The World Bank.
    14. Shapiro, Daniel & Oh, Chang Hoon & Zhang, Peng, 2023. "Nighttime lights data and their implications for IB research," Journal of International Management, Elsevier, vol. 29(5).
    15. Gong, Da & Shang, Zhuocheng & Su, Yaqin & Yan, Andong & Zhang, Qi, 2024. "Economic impacts of China's zero-COVID policies," China Economic Review, Elsevier, vol. 83(C).
    16. Dang, Hai Anh H. & Jolliffe, Dean & Serajuddin, Umar & Stacy, Brian, 2024. "Country statistical capacity: a recent assessment tool and further reflections on the way forward," LSE Research Online Documents on Economics 124060, London School of Economics and Political Science, LSE Library.
    17. Tanner Regan & Giorgio Chiovelli & Stelios Michalopoulos & Elias Papaioannou, 2023. "Illuminating Africa?," Working Papers 2023-11, The George Washington University, Institute for International Economic Policy.
    18. Bonggeun Kim & John Gibson & Geua Boe‐Gibson, 2024. "Measurement errors in popular night lights data may bias estimated impacts of economic sanctions: Evidence from closing the Kaesong Industrial Zone," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 375-389, January.
    19. Li, Xiaoxia & Cai, Guilong & Lin, Bingxuan & Luo, Danglun, 2024. "Macroeconomic data manipulation and corporate investment efficiency: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 94(C).

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