24 September 2009

Good Read

I skip thorough to the main points, but this hits on the ways that statistics can be used harmfully in the aid world.  Read the full article on Aid Watch to really understand the points, but this will get the main gist of the post (the title is great and I do not want to skip on mentioning it: We Must Know How Many are Suffering, So Let’s Make Up Numbers).

As major world leaders jet from the UN General Assembly yesterday to the Pittsburgh G-20 today, the UN and World Bank have bombarded them with messages and statistics about the effect of the crisis on the global poor:

(1) We need to know how many are suffering where, so that help can be targeted to those in most need,
(2) Here are our precise numbers of how many additional poor have been created by the crisis,
(3) Since we based the numbers in (2) on thin evidence or no evidence whatsoever, you should also give us more money to expand our abuse of statistics.

They continue…

There is an obscure piece of theoretical statistics called “garbage in, garbage out.” Calculating “additional poor in poverty due to crisis” requires knowing (a) what growth would have been in absence of crisis in every country, (b) what growth will actually turn out to be in 2009 or 2010 in every country, not to mention in 2008, since the World Bank’s World Development Indicators do not yet have estimates for that year, (c) having good data on the current level of world poverty, (d) knowing the effect of growth on poverty, (e) projecting the effect of food and fuel prices on poverty, not to mention projecting food and fuel prices.

The reality is: (a) is impossible, (b) is almost impossible, (c) Voices of the Vulnerable says last real global poverty numbers were in 2005, which themselves reflected an upward revision of 40% (d) is unreliable and volatile, and (e) is impossible.

Economists can do useful projections sometimes, but the castles in the air implied by (a) through (e) should have caused a responsible analyst to NOT invent such a number.