Glossary
CAGR Economic
Compound Annual Growth Rate. The average yearly growth rate over a period, accounting for compounding. If GDP grows 100% over 10 years, CAGR isn't 10%, it's about 7.2% because growth builds on previous growth.
Usage: "Obasanjo's GDP CAGR was 7.7%, meaning the economy grew about 7.7% each year on average."
Constant USD Economic
Money values adjusted for inflation, locked to a base year (2015). Removes the effect of rising prices so you can compare "real" economic output across years. $100 in constant 2015 USD buys the same amount of stuff whether you're measuring 1999 or 2023.
Why it matters: Without this adjustment, GDP would appear to grow just because prices went up, not because more was produced.
Correlation (r) Statistics
A measure of how two things move together. Ranges from -1 to +1. r=+1 means perfect positive relationship (when A goes up, B goes up). r=-1 means perfect negative relationship. r=0 means no relationship.
Example: "Governance and GDP have r=0.68, a positive correlation. When governance improves, GDP tends to improve too, but not perfectly."
⚠️ Correlation ≠ causation. Just because two things move together doesn't mean one causes the other.
Counterfactual Analysis
A "what if" scenario. We ask: "What would Nigeria's GDP be if governance had been better?" Then we estimate the answer using statistical models. It's hypothetical, we can never know for sure what would have happened.
Example: "Governance-gap estimates range from roughly $0.6 trillion (single-country regression) to $0.9 trillion (cross-country panel). All are correlational with wide confidence bands; oil prices confound the relationship."
GDP Economic
Gross Domestic Product. The total value of all goods and services produced in a country in one year. It's the most common measure of economic size. Nigeria's 2023 GDP was about $520 billion (constant 2015 USD).
Limitation: GDP doesn't measure quality of life, inequality, or environmental damage. A country can have high GDP and still have widespread poverty.
GDP Per Capita Economic
GDP divided by population. Roughly measures economic output per person. More useful than total GDP for understanding living standards because it accounts for population size.
Example: "Nigeria's GDP grew under Buhari, but GDP per capita fell, meaning population grew faster than the economy."
Gini Index Economic
A measure of inequality. Ranges from 0 (perfect equality, everyone has same income) to 100 (perfect inequality, one person has everything). Nigeria's Gini fell from 51.9 (1996) to 33.9 (2022), suggesting reduced inequality.
Context: South Africa has about 63 (very unequal). Sweden has about 25 (relatively equal).
Governance Governance
How well a government functions. Not about *what* policies are chosen, but how effectively they're implemented. Includes rule of law, corruption control, regulatory quality, and government effectiveness.
Note: A government can have good governance but bad policies (or vice versa). We measure governance quality, not policy ideology.
p-value Statistics
The probability that a result occurred by random chance. Lower p-values = more confident the result is real. p < 0.05 is typically considered "statistically significant."
Example: "p=0.02 means there's only a 2% chance this correlation is random noise."
Rule of Law Governance
Whether laws are applied fairly and consistently. Measures: Are contracts enforced? Do courts work? Are property rights protected? Can citizens trust legal institutions?
Why it matters: Rule of Law has the strongest correlation with GDP of any individual governance indicator on this site (r=0.72). Businesses invest where contracts are honoured.
Statistical Significance Statistics
A result unlikely to have occurred by chance. Usually means p < 0.05 (less than 5% probability of being random). Significant ≠ important, a tiny effect can be statistically significant if the sample is large enough.
WDI Data Source
World Development Indicators. The World Bank's main database of economic and social statistics. Covers 200+ countries with standardized methodology. Our GDP, poverty, and sector data come from WDI.
WGI Data Source
Worldwide Governance Indicators. World Bank database measuring governance quality across 6 dimensions. Scores range from -2.5 (worst) to +2.5 (best). Data available from 1996.
Year-over-Year (YoY) Economic
Comparing one year to the same period in the previous year. "GDP grew 5% YoY" means this year's GDP is 5% higher than last year's.