Dodgy data

It turns out that, as with most economic data, In Kiribati you need to experience things for yourself to understand what real life is actually like. On closer examination most of the trade statistics are wrong — for instance over the last decade the balance of payments conflict with the export and import reports. It’s almost certain that misreporting occurs at the border, while some estimates suggest that the fisheries sector is far bigger than reported in official GDP statistics. The methods used for quantifying the subsistence sector are also open to question; double-counting may occur when measuring household production and consumption and overall subsistence output.

So my September 7th post , as I suspected at the time, needs to be taken with a large grain of salt.

Data in most countries is similarly dodgy — it’s just that you don’t always get to know about it. Just because an international agency like the World Bank compiles a data set it doesn’t mean it’s correct, even if a certain amount of cross-checking can be done (like the IMF flow of funds analysis). All trade and economic data comes from governments, which are fallible.

A lot of econometricians, with their elaborate models and alleged precision, are probably off the mark because their raw material — the data — is wonky. In my view the only way to understand a country’s economy properly is to balance official data with subjective assessments, which you can only achieve by speaking to local people and trying to understand things from their perspective. At the very least this means rigorous interviews, cross-referencing and observation, ideally over a long period of time and through immersion in the local culture. You won’t understand much about a country by inputting data into a standard model, or through a quick fly-by to collect numbers from the Department of Statistics.