I summarize my recent research with Jacob Assa on how changes to how GDP is measured has uneven impacts on developing vs. developed countries for The Conversation.
The World Bank has added its voice to those predicting the global economy will recover faster from the pandemic than previously thought. According to its latest report, global GDP will grow 5.6% in 2021 – a significant upgrade from the 4.1% forecast at the beginning of the year.
Beneath this headline figure are country forecasts that point to very uneven economic recoveries across the world. The US is forecast to grow at a world-beating 3.3%, for instance, while emerging markets and developing economies as a whole are to grow 0.8%.
But if these numbers turn out to be accurate, they’re not telling us an objective truth about how these economies are performing in relation to one another. What most people don’t realise is that the rules about how GDP is calculated are highly political. In my recent research with Jacob Assa of the UN Development Programme, we unpicked how changes to how GDP is measured over the years have disproportionately benefited countries in the west, including the UK. This has enormous implications for everything from the international political clout of different countries to their credit ratings.