Starving and Deceiving? How Disasters Reshape Politicians’ Lies

Abstract

Dishonest politicians can be highly detrimental to economic development. How do disasters reshape politicians’ lies? Using data from the tragic famine in China (1959-1961), we employ a difference-in-differences approach to show that public officials with childhood (0-6 years) famine exposure are less manipulative in local GDP calculations, and the reduction in manipulation is more significant for officials more severely impacted by the disaster. We further reveal that famine-exposed local politicians take stronger moral stances on honesty, and are thus more reluctant to lie. The paper highlights how false policymaking alters the long-term welfare of society through occupational externalities.

Keywords: Famine, Lies, Politicians, GDP Manipulation

JEL Classification: D91, H83, J18