02/06/2020 The proliferation of fake stylized facts - The Washington Post

Democracy Dies in Darkness

The proliferation of fake stylized facts

Everyone is concerned about fake news. Let's talk about the fake facts that elites like to toss
around.

By Daniel W. Drezner
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and
Diplomacy at Tufts University and a regular contributor to PostEverything.

Dec. 7, 2016 at 2:54 p.m. GMT

If you’re reading Spoiler Alerts, then you’re probably aware of the problem of
“fake news.” But are you aware of the problem of fake stylized facts?

What is a stylized fact? Sociologist Daniel Hirschman wrote a great paper about
the phenomenon this year. He observed:

Stylized facts are not full-fledged explanatory theories. Rather, they are the
regularities that social scientists build theories and models in order to explain. And
yet, the identification of stylized facts, and consensus or dissensus about the facts
identified, can have powerful political consequences even in the absence of causal
models.

In policy terms, a stylized fact is a factual statement or figure or chart that grabs
your attention, becomes assumed as given, and sets an agenda. For one example,
consider Branko Milanovic’s “elephant” chart demonstrating the odd pattern of
global income gains between 1998 and 2008:

The chart above comes from an American Prospect essay about Branko
Milanovic’s work. It’s pretty self-explanatory as labeled, but the obvious reason
it has attracted so much attention is because of the conclusion that the
“developed-world middle class” has stagnated in the current globalized economy.
Indeed, my Washington Post colleague Matt O’Brien has highlighted this chart as
well suggesting that “this chart is really a Rosetta stone for politics today ”
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well, suggesting that this chart is really a Rosetta stone for politics today,
because Trump supporters are those in the developed-world middle class who
are suffering from stagnating incomes.

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So Milanovic’s chart is a great stylized fact. But what if it’s not entirely accurate?
We don’t know for sure that those at the 80th percentile suffered from
globalization or something else. There’s an observable correlation and an implied
causation at work. But a lot of other things happened in the world between 1988
and 2008. Does globalization explain that chart?

Caroline Freund at the Peterson Institute for International Economics has a very
helpful explainer of this chart, based on research by Adam Corlett at the
Resolution Foundation. It turns out that what’s driving this chart isn’t what most
wonks think:

The chart shows graphically how the incomes of the world’s poor and the world’s
richest people have grown sharply over time, but it also identifies a group caught in
the middle where incomes stagnated. This group was mistakenly identified as the low
and middle classes of mature economies like the United States. Because global trade
and investment also increased in this time frame, globalization became the culprit,
harming a large swath of advanced nation workers….

A problem with this interpretation is that there are numerous alternative explanations
for the shape. A lot of things happened between 1988 and 2008: For example, the fall
of the Soviet Union and the economic stagnation of Japan, driven by its rapidly aging
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population, caused income in those countries to decline or stagnate, irrespective of

globalization. While integration was partly responsible for China’s rise, the shift from
a state-run economy to private sector growth mattered enormously.

This chart shows what happens when you look at Milanovic’s chart minus China,
Japan and the ex-Soviet countries:

And suddenly, gosh, what do you know, it turns out you have a world that does
not look like the stylized fact articulated by a lot of people for the past year.

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None of this is to say that the American middle class has been doing great over
the last 20-30 years. But it does suggest that the culprit everyone wants to blame
might not be the primary culprit.

There are other dubious stylized facts out there. The New York Times story by
Amanda Taub last week about Yascha Mounk’s democratic decay argument is
another one. Taub writes that “liberal democracies around the world may be at
serious risk of decline” and has an eye-popping chart to go along with it. It
certainly caught a lot of expert attention:

William Easterly
@bill_easterly

As a democracy expert, I have no frigging clue why this is

happening
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1,656 5:51 PM - Dec 1, 2016

2,690 people are talking about this

Sounds terrifying. But as Jeff Guo and Erik Voeten note when they
independently looked at the data, the NYT chart is wildly overhyped. It’s based
on respondents who, on a scale from 1 to 10 of importance, gave a 10 to living in a
democracy. When you consider the respondents who, say, replied with an 8 or a
9, the numbers look far less disconcerting. Voeten concludes: “The article by
Mounk and Foa does document some small shifts in opinion on related issues.
But these aren’t nearly as dramatic as the New York Times graph suggests. Vast
majorities of younger people in the West still attach great importance to living in
a democracy.”

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Or, to summarize it in a tweet:

as udde #IamAntifascist
@CasMudde

The @nytimes panic graph (1) is based on only value 10. If you
would use data (2 and 3) more intelligently you would see no
need to panic!

359 3:38 AM - Nov 30, 2016

344 people are talking about this

Full disclosure: I have used both of these stylized facts in my course lectures this
calendar year. They’re eye-catching, and I had yet to see countervailing evidence.
I was just fortunate to note these follow-ups. Many other wonks will not even
notice the questioning of these stylized facts.

Just as fake news can go viral in certain parts of the population, so can fake
stylized facts. And it’s worth remembering that before judging just how gullible
other people really are.

Daniel Drezner
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and
Diplomacy at Tufts University and a regular contributor to PostEverything. Follow

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