Courtesy of The Economist (subscription required), an interesting article on how – in the absence of reliable numbers – scholars are trying new forms of guesswork to measure the North Korean economy:

FACTS about the North Korean economy are not so much alternative as non-existent. The country has never published a statistical yearbook. If it did, no one would believe it. Nicholas Eberstadt of the American Enterprise Institute, a think-tank, calls analysis of its economy “essentially pre-quantitative”.

The most-cited estimate of the size of the economy comes from South Korea’s central bank. Its methodology is opaque but is based, at least in part, on the South Korean intelligence agency’s estimates of the North’s physical output, which is then translated to South Korean prices. But it is hard to estimate market valuations for goods that are not traded on the market, and physical goods make up only a fraction of overall economic output. Another technique is to “mirror” statistics from the country’s trading partners. But most North Korean trade is with China, where statistics are unreliable.

North Korea’s economy has made great strides since the country’s famine in the 1990s. The government has tacitly allowed the market economy to grow. Although the rest of the country is still indisputably poor, visitors to Pyongyang, at least, cannot help but note the rise of shops and taxis. The paradox is that as the North Korean economy modernises, the data may actually be deteriorating. The size of the country’s apparently burgeoning service sector is a complete mystery. Many scholars believe that the South Korean numbers are too low. Welcome though it is for poor North Koreans, growth may be bad for statisticians.