Authoritarian Information Problems: Data Manipulation in China

Abstract:     
Social scientists question the veracity of the statements of politicians, yet officially released economic statistics are rarely treated with similar skepticism. Are economic data systematically manipulated? Using cross-national and sub-national Chinese data, this paper leverages variation in the likelihood of manipulation over two dimensions, arguing that politically sensitive data are more likely to be manipulated at politically sensitive times. Cross-nationally, headline GDP differs from the highly correlated but less closely watched electricity consumption series across regime types in patterns consistent with dictatorships exaggerating GDP. At the sub-national level in China, the difference between GDP and electricity growth increases in years with leadership turnover, consistent with a reported political business cycle. The analysis points to the limits of non-electoral accountability mechanisms in dictatorships and suggests caution in the use of politically sensitive official economic statistics.

Number of Pages in PDF File: 43

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