The Third Kind of Lie

"There are three kinds of lies: lies, damned lies, and statistics." - Benjamin Disraeli


My uncle sent me an article from the Wall Street Journal by Bruce Gilley entitled "The Beginning of the End". The article itself describes the author's view that Tiananmen Square forced the Chinese Communist Party along a line that will eventually lead to democratization. I may follow up in future posts that take issue with that portion of it, but I haven't the time to craft that piece tonight.
I would like to throw something out there about one of his arguments, namely that economic development causes a change in population's toleration of authoritarian regimes. The two paragraphs are quoted below. (I have been unable to find a free copy of the article, so cannot link it right now)

" Second, as China develops, so will the preferences of its citizens. Given its current low level of economic development ($4,660 GDP per capita in 2006 according to the latest revisions to the World Bank's price-adjusted data, about one tenth of the OECD average), it is completely normal that those preferences are not strongly democratic at present. Most countries with similar income levels – Angola, say, or Azerbaijan – are also authoritarian.

The Chinese Communist Party's successful incorporation of the new middle class and of private business leaders is also wholly normal for a country at its stage of development. In Taiwan, South Korea and the Philippines, not to mention throughout Latin America, the middle class and business sector were no less co-opted by authoritarian regimes until the very eve of democratic transition."

Assuming he is correct about the basic argument, which I am not convinced he is, there are two flaws that I see. First, that there is no guarantee that China's economy will continue to grow. There are many serious concerns as to how long it can sustain its growth.
The second formed the topic for this post. I do not pretend to be an economist, but Prof. Gilley is not one either, apparently. I got on the handy World Bank website and checked out some of the figures myself - as I am wont to do - and found several flaws:

- It is apparent he is citing per capita Gross National Income (GNI) vs. Gross Domestic Product (GDP). Maybe an innocent mistake, but when something like that happens, I immediately become suspicious that the person citing the numbers is not familiar with what they are really citing.

- After citing the Philippines as an example of the middle class rising up do overthrow the authoritarian regimes, one would think their per capita GNI is in the same ballpark as the other countries he listed - it's actually lower than China's - $3430.

- When you have 1.3 billion people, the big problem with raising per capita GNI is the "per capita" part. To raise the GNI to the OECD average mentioned in the article ($35,586), China would have to raise its GNI to $46 Quadrillion. That's over 3/4 of the WORLD's gross income for 2006. But, assuming no ceiling and that large population gives you equally large workforce, and a 12% GNI growth rate, which China has been maintaining for the past 5 years or so (which even the Chinese agree has to slow down sometime), it would still take 18 years. And that's assuming the aging population, male-to-female ratio, environmental, urban-rural, and energy consumption problems don't slow them down further.

China may democratize, and I hope they do, but I'm not holding my breath.

PS - If there are any real economists out there, please feel free to comment. I'd love to hear what you think.