Why you want good national statistics

In this age of austerity measures, every public expense is subject to higher scrutiny than usual. Statistical offices are under particular pressure as politicians do not quite seem to see the point of making informed policy decisions (or are actively trying to hide the real situation of the economy, as in Argentina and possibly China again). What makes good public statistics valuable? One could make a theoretical argument about optimal policies, policy uncertainty and expectation formation, but here nothing beats empirical evidence.

Oasis Kodila-Tedika looks at Sub-Saharian African countries. Of course, these results may not carry over to developed economies, but Africa has the advantage of bringing substantial variation in the data to the table. He uses a measure of statistical capacity from the World Bank and shows that higher values have a positive impact on government effectiveness, as measured by survey results on perceptions of governance. While the results are statistically very significant, it is impossible, though, to determine whether they are economically significant, as the units in the variables have no direct economic meaning. But an improvement of statistical capacity from the worst country to the best one would improve more government effectiveness than improving GDP per capita from the worst to the best. That is huge, even though there is substantial endogeneity that needs to be accounted for, but I doubt it would make all of the effect disappear.