Politics and Economic Statistics: A Tragic Story

Abstract

Construction of national economic statistics such as GDP had its origin in the work of Simon Kuznets, Colin Clark, Richard Stone and other economists during the 1930s and the post Second World War years. In the debate about some foundational issues Kuznets’s views were ultimately rejected in favour of those of the Keynesians. Though their link with true welfare of the citizens is fairly weak, GDP and other summary indices are widely used to assess an economy’s overall performance. Politicians have succumbed to the temptation of doctoring data to ‘improve’ the performance of the economies under their control. India had a globally acclaimed system of efficient and scientific national accounting. Much of that reputation has been lost over the past decade. Due to the unavailability, unreliability and inconsistency of official data, independent research on policy evaluation has suffered a serious setback.