Eye Candy: the GDP (PPP) per capita of OECD Administrative Units (UPDATED)

Here is what I was able to patch together in my free time.

The countries I’ve filled in were about half of the OECD. The data is hard to get on administrative units elsewhere in the world (I got my data from the OECD website), but it was also hard to get for OECD states. The reason it was hard is because OECD data collectors divide up administrative units into two separate categories (TL2 and TL3) that sometimes correlate to traditional administrative units (such as California or New South Wales) and are sometimes arbitrary creations of EU or OECD bureaucrats designed specifically for data collection (rather than for understanding the historical trajectory of regions within a state).

Does this make sense?

To make matters worse, sometimes the TL2 category correlated with an actual administrative unit with political representation in a capital, and sometimes the TL3 category was the actual administrative unit with political representation. So I had to thumb through the nitty-gritty details of how OECD states send representatives to central parliaments and then match those real-life details to the data collectors TL2 and TL3 categories.

Does this make sense?

The map above highlights the US, Canada, Australia, Germany, France, the UK, Spain, Poland, Austria, Italy, Czech Republic, Chile, Denmark, and Mexico. These countries are all TL2 states.* I have no idea what that is supposed to mean for data collectors, but it means to dorks like me that their TL2 categories send political representatives to capital cities, whereas their TL3 categories likely send political representatives to regional capitals.

Does this make sense?

I have continued entering the data that the OECD has provided for the GDP (PPP) per capita of TL3 units (which send political representatives to capital cities), but the map I downloaded does not outline TL3 units (it only outlines TL2 units). So unless I want to spend time carving out TL3 units onto a TL2 map I am going to have to stop filling out the map. I’m all for collaboration on this, of course.

Here is the table I have (very slowly) been working on, but when I colored in the map above (the TL2 states), I divided them up into six groups based on highest GDP (PPP) per capita to lowest. The richest administrative units were purple, followed by blue, followed by green, followed by yellow, followed by orange, followed by red. So: purple is rich, red is poor. Got it? Because I started adding the TL3 states to the table, and because the map doesn’t allow for me to add the TL3 states to it, I forgot the range of the colored TL2 units. Dividing them up into six groups is a pretty easy task, though, so you should just trust my coloring scheme.

The map I created doesn’t have a very good zoom-in function, but what I found interesting is that Europe has a lot more economic inequality than the US, Canada, and Australia. Look at France. It’s mostly yellow, and the only purple (rich) administrative unit is Paris metro. This suggests, of course, that wealth in France is concentrated in the capital. The UK looks just like France (as does Spain). Germany is divided in half (as is Italy), and Austria and Denmark are cool, rich colors. Canada and Australia only have one yellow province each, and the US has none. Mexico looks just as Michelangelo described it, and Chile looks like Spain.

This is the OECD page I’ve been using. Here’s how I find regional GDP (PPP) per capita:

  • select “Regions and Cities”
  • select “Large (TL2) and Small (TL3) regions” – remember it’s either/or here: either TL2 or TL3 but not both
  • select “regional GDP per capita”
  • Then for measures (top of table) select “per head, current prices, current PPP”

I’ve been using 2011.

This pdf lists the “territorial grids” (TL2 and TL3 regions) of the OECD. The pdf didn’t help me figure out which regions send political representatives to capital cities and which are arbitrary, bureaucratic creations (I got to do that on my own!), but lists can definitely be helpful. In many cases I was able to figure out which units are politically viable and which are arbitrary for data collecting purposes just by looking at the list.

Finally, here is a map – courtesy of kelsocartography.com – of the world’s administrative units, at the TL2 level. Lots of work to do.

A good map of the world's administrative units
Here is a map of the world’s administrative units (courtesy of kelsocartography.com), but not necessarily the units that data collectors use to calculate GDP (PPP) per capita.

I like using the GDP (PPP) per capita of administrative units because I think it gives a much more stark picture of life around the world. I have pointed out before that the UK is now poorer than Mississippi, but breaking down the UK in the same manner as we do the US reveals that not only is the UK poorer than the poorest US state, the purchasing power parity of British citizens within the UK looks a lot more unequal than what we see in the United States. What is going on in the UK? The NHS can’t be that bad.

* – Oops, except for Denmark (it’s TL3)

UPDATED (3/11/2015):

There is a bit more to interpreting the data in regards to political representation that I’d like to muse on. The statistical units used by OECD and EU bureaucrats do not line up perfectly with representative political units all the time. The one for Greece, for example, is especially telling. In the pdf listing the statistical units that the OECD uses, Greece has 13 TL3 units (and only 4 TL2 units), whereas in Greek elections there are over 40 representative political units. There is just no way I could put that on my flimsy map. Likewise, Denmark’s OECD units has 11 TL3 units (and only 5 TL2 units), but the number of representative political units in Denmark clocks in at 10. I can take artistic liberties in regards to my map, of course, but the OECD statisticians and the actual political units in Denmark are still different (albeit slightly).

My first reaction was to be miffed by the pomposity of OECD bureaucrats. “They don’t care a whim for actual, existing national institutions,” I thought. “This is a case of condescending, Left-wing  internationalists imposing their values onto existing structures.” After thinking about these mismatches, though, it became apparent that the administrative units of Europe – indeed, the countries of Europe itself – are all relatively new and often changing due to local patterns of development. That is to say, the states of Europe are just as young – institutionally – as the post-colonial states of Africa and Asia. World War 2 destroyed the old institutional order of Europe. Given this recognition, I had to ask the obvious: why is Europe so rich, then, compared to Asia and Africa? I can think of two answers, but I recognize there are more. 1) Europe, despite it’s destruction and despite its relatively new institutional structure, has been “capitalist” a lot longer than Asia and Africa. So even though Europe’s institutions are as new as Asia’s and Africa’s, there is a path dependency in Europe that enabled it to be better prepared for the international order created by multilateral US institutions and the indigenous regional institutions that slowly built up over time – with compromises made in order to build consensus. 2) These regional institutions, and the internationalist institutions built by the US (also on consensus), are mostly missing in Asia and Africa; there is no equivalent of the European Union on the continents of Asia and Africa. The multilateral institutions the US built in these poorer regions were not based on consensus in the same way that they were in Europe, either.

I think the internationalism in Europe, however imperfect, goes a long way toward explaining why Africa and Asia are not as rich as Europe.

11 thoughts on “Eye Candy: the GDP (PPP) per capita of OECD Administrative Units (UPDATED)

    • I had, in a roundabout way (“Campeche, despite its oil wealth, shouldn’t be purple”), but ultimately I wanted to better understand political dynamics rather than economic ones and I think that GDP (PPP) per capita already does a decent enough job of adjusting for population size. In my mind, there is such a thing as being too perfect in regards to data measurement and political understandings at the macro level. Besides, trying to further adjust for population size is way too sophisticated for me.

      That being said, what did you have in mind?

  1. Good job, man (I follow you easily because I work a lot with statistics, something with maps, and I’m quite interested in subnational units). Btw, you’d like to know Nordhaus’s map (http://gecon.yale.edu/pixeled-contour-globe), which imputes economic activity at the PIXEL level (you see that economic activity is overwhelmingly concentrated in cities) and this paper by Mitton (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2239402), which looks at variation within administrative units for (almost) all countries. Notice, however, that Mitton uses “country fixed effects” which basically means that he looks at variation within countries, i.e. he tries to understand what makes some regions richer or poorer with respect to the country average (you cannot compare why Mississippi is richer than the UK).

    Regarding your argument about Europe, I don’t have a theory but I have some different explanations. First, Europe was richer than Africa, on average, before the war, and the damage done by the war, though extensive, didn’t destroy the main sources of these identities (i.e., infrastructure, some national identities that favored market integration, the existence of a legal corpus to allocate disputes, or the a centralized government bureaucracy, etc). Many poor countries in the world are waaaaaay behind Europe in that respect, even today. And second (and I think this is Mancur Olson’s argument, though I’m not sure) one might argue that the war was beneficial in economic term because it did destroy all those cozy lobbies between government officials, bureaucrats, and industrialists that had led to the establishment of self-serving regulations, monopolies, and the like. In other words, it destroyed the cryonism, without affecting the underlying capitalist structure.

    • Thank you Adrián. One of the reasons I worked up the courage to ask you to blog with us here is your interests (especially in subnational units and, of course, maps!).

      I just downloaded the Mitton paper (thanks again for the heads up here) and will try to blog my thoughts on it when I get the chance.

      The argument that World War 2 was beneficial to Europe will not go over well with some hardline American libertarians (broken window fallacy?). I think it’s worth exploring more, and I’ll try to dig into some of Olson’s work and see if that’s where I should start.

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