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

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.

Automated summary

This study examines the overstatement of economic growth in autocracies by comparing self-reported GDP figures to night-time light recorded by satellites. The findings show that autocratic regimes tend to have a higher elasticity between night-time light and GDP, even after considering differences in various country characteristics. The degree of overstatement is greater in autocracies with stronger incentives to exaggerate growth or weaker constraints on manipulation. The results suggest that autocracies inflate yearly GDP growth by approximately 35%, and adjusting the data for manipulation provides a more nuanced understanding of their recent economic success.