GAO Mission and Operations:

Status of GAO's Review of Estimates of the Soviet Economy

T-NSIAD-90-55, Jul 16, 1990

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GAO discussed its review of the Central Intelligence Agency's (CIA) estimates and analyses of the size of the Soviet Union's economy. GAO noted that: (1) Western economists widely used the CIA estimate as a detailed alternative to the Soviet Union's problematic official estimates; (2) CIA estimated the Soviet gross national product (GNP) for a base year and then calculated real growth rates for other years using data on changes in the various GNP components; (3) problems involving the quality of official statistics, measurement of quality changes, unreported activities contributing to GNP, the Soviet Union's centrally planned economy, calculation of adjusted factor cost prices, and potential biases in data used to construct sector indices presented challenges to CIA calculation of Soviet GNP; (4) CIA attempted to refine its methodology and improve its calculations of Soviet GNP through conferences and discussions with outside experts and scholars; and (5) CIA declined to make available to GAO any critiques or evaluations of its methodology and refused to meet with GAO or provide any briefings regarding its economic analysis.