Show Me the (Correct) Numbers: Information Misreporting and China's Statistical Reform
Posted: 8 Feb 2023
Date Written: November 1, 2021
Deliberate misreporting of statistical information threatens the state's effective governance, but relatively little is known about how it can be addressed through institutional reforms. This article theorizes the institutional constraints that officials are facing in manipulating information about their performance along two dimensions (1) the chance of misreporting being detected and (2) the credibility of punishment if misreporting is caught. Empirically, leveraging China's centralization reform of the statistical system, this article uses a staggered difference-in-difference design to examine its impact on low-tier officials' misreporting of economic statistics. Results show that prefecture-level governments significantly decreased their misreporting by 2.5% on average after the institutional reform. However, the effects of this reform were offset by patron-client connections between provincial and central leadership. Thus, although the state can improve information capacity through institutional building, patron-client networks might undermine institutional strength.
Keywords: Authoritarianism, Information, Statistical Misreporting, China
JEL Classification: H7, P2
Suggested Citation: Suggested Citation