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Shedding Light On Lies

This may start with an old, perhaps exaggerated, story… Once, a Soviet official, involved in the Five-Year Plan, was asked to visit the Office of Joseph Stalin. Stalin had reportedly enquired the official about the growth rate of the Soviet Economy that year. In a low voice, the official asked Stalin: “Sir, how much do you want?

This, in other words, is the reality in a State under the reign of a dictatorial or authoritarian ruler. An important hallmark of the Authoritarian Rule is the tendency to withhold information. The Global Community successfully ensured an information-free world in the late 20th Century. However, the international community had to wait for the collapse of Socialism, or for a great famine to ensure the same. Even where there is a lack of Democracy in the 21st Century, there is insufficient information. Luis Martinez, an Assistant Professor of Economics at the University of Chicago’s Harris School of Public Policy, has shown a way to break authoritarian control over information.

It could be said that Martinez has resolved the mystery from space, in the dark of night. In fact, the method of measuring the economy, using night-time images taken from satellites, has become increasingly popular over the past decade. In 2012, J Vernon Henderson, Adam Storeygard and David N Weil, the three researchers from Brown University and the National Bureau of Economic Research, mentioned in a research paper that the economic growth of a country could be measured by judging the intensity of light at night from satellite images taken from outer space. Although the method is a complex one, its underlying logic is quite straightforward. The more prosperous the economy, the greater the economic activities of a country. In that case, economic activities will continue not only during the day, but also at night. Naturally, the use of light will increase at night, and modern satellite imagery will capture the intensity of that light.

Martinez has used this method to find the rate of economic growth of not any particular country, but of the entire world. The main feature of his work is that Martinez has classified the countries according to the strength of Democracy, and then he has identified those countries where there is a lack of Democracy. He has found that the majority of these countries suppress information regarding their economic growth. It is an easy process. Martinez has just compared the statistics, given by the Government about the economic growth of a country in a particular period, with the rate of increase in the intensity of light at night. If it is proportional, then the Government has given correct statistics.

Most importantly, Martinez has also found that a Democratic country, with a 10% increase in the intensity of light (at night), has witnessed a 2.4% increase in its GDP. On the other hand, a not-so-Democratic country has recorded a 2.9-3.4% GDP growth when the intensity of light has increased by 10%.

The question arises here is: What happens in Authoritarian Regimes that causes the relationship between the intensity of light (at night) and GDP growth to differ from that in the free world? Martinez has made an attempt to find the answer from various angles… in a way, by ascertaining the structure of the economic system, by controlling the character of urbanisation, etc. Even after considering the difference in the intensity of light because of these issues, he has failed to explain that relationship. Rather, some other factors are having a significant impact on it. For example, Martinez has mentioned that a lot depends on whether a country has truly independent political, economic and judicial institutions. He has discovered that the lack of independence of these institutions increases the magnitude of the discrepancy between the intensity of light and the rate of economic growth.

The main essence of Martinez’s research is to provide concrete evidence that the Authoritarian Regimes often withhold important information. His work has also made it clear that it is possible for one to find new ways, if s/he can think out of the box, and see the world with open eyes. No Authoritarian Ruler can block those ways.

Source: Henderson, J Vernon, Adam Storeygard, and David N Weil. 2012. “Measuring Economic Growth from Outer Space.” American Economic Review, 102(2): 994-1028.

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