Statistics, knowledge and progress

Secretary-General of the OECD

“Nothing exists until it is measured”. This keen observation by the Danish physicist and Nobel laureate, Niels Bohr, has become something of a leitmotiv in the statistics world, but it bears some scrutiny.

After all, we are producing more statistical information than ever before. Indeed, many of us feel overwhelmed by it. In 2004, the US government alone spent nearly $5 billion for financing statistical programmes. All very well, but do we know what information we should pay attention to, and what to do with these measurements once we have them? When all is said and done, is the volume of information with which we are all inundated improving decision-making, governance, business strategies, or standards of living? Are we better prepared to confront the challenges of the 21st century?

Not necessarily. Statistics are information, but as Albert Einstein put it, “information is not knowledge”. Yet, it is knowledge that leads to good decision-making and spurs progress. Statistics are raw material for the creation of knowledge, just as steel is raw material for manufacturing automobiles. Obviously, the quality of statistics is critical for public policy. Flawed information undermines knowledge, and can lead to poor policy decisions, and undermine progress.

Alas, to quote from Joel Best’s book, Damned Lies and Statistics: “many – probably the great majority – of bad statistics are the result of confusion, incompetence, innumeracy, or selective self-righteous efforts to produce numbers that reaffirm principles and interests”. Bad and misleading statistics do exist, and they are used in the public domain to sell newspapers and fight elections. “Deliberate deceptions”, Best called them. Little wonder our trained statisticians cover their data in footnotes and caveats in a bid to prevent their misinterpretation! But footnotes are not enough. Education is also vital; people have to be trained to evaluate carefully the numbers they are given, to think critically and to detect “spin”, particularly in today’s number wars.

Climate change is a good example. Global warming is occurring, but poor data, or misuse of good data, can lead to unhelpful overreaction on the one hand, inaction on the other. Economic growth is another case in point. What does gross domestic product really tell us about economic and social progress? Not much. As the late Robert Kennedy remarked, such an indicator “does not capture the health of our children, the quality of their education, or the joy of their play – it measures everything, in short, except that which makes life worthwhile.”

Today, citizens expect a more comprehensive measurement and understanding of progress, based on quality as well as quantity. We need to refine our indicators and extend the concept of growth to oversee society’s progress as a whole. How?

To my mind, good policy relies on a triangular paradigm anchored at one side by economic growth and on the other by social stability or social cohesion, with good governance ensuring the transfer of the benefits of growth to society as a whole, with this paradigm resting on natural capital (the environment). To sustain progress, governments must design and adapt their policies on all three fronts.

How do we know we are on the right track? Should we introduce globally accepted standards – or key indicators – for measuring progress? This is where the OECD comes in. We are known for our robust data, but the OECD is far more: it is a “knowledge-based” organisation committed to building expertise, intelligence and advice for guiding policy action and progress. It is the hub of a global knowledge network of experts, government and civil society.

The OECD is widely recognised as one of the most influential international bodies in arming policymakers and the public with the information and guidance needed to face current and future challenges. Underlying our way of working, our strong analytical skills, our networks for policy dialogue and our development of international benchmarks, are reliable statistics. The OECD, with other international organisations, can help, through advice, benchmarking and setting feasible targets, as we have done with the Millennium Development Goals, and promoting “evidence based decision-making”, as we did at the World Forum on Key Indicators, held in Palermo, Italy, in November 2004.

Governments too can take action. In the Measuring Australia’s Progress (MAP) initiative, for example, progress is “not only improvement in the material standards of living, or other changes in the economic aspects of life, but also changes in social and environmental areas.”

Such initiatives rely not on data alone, but on building knowledge. They hold great promise. As Benjamin Franklin said, “an investment in knowledge pays the best interest”. The OECD is committed to supporting such an investment and sharing with the rest of the world its unique statistical and analytical treasury.

©OECD Observer, No 246-247, December 2004 - January 2005




Economic data

GDP : +0.5%, Q4 2014
Employment rate: 65.9%, Q4 2014
Annual inflation : 0.57% Feb 2015
Trade : -3.0% exp, -3.7 imp, Q4 2014
Unemployment : 7.022% Feb 2015
More moderate expansion ahead? Composite leading indicators
Updated: 14 Apr 2015

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