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Political Entrenchment and GDP Misreporting

Ho Fai Chan, Bruno Frey (), Ahmed Skali () and Benno Torgler

CREMA Working Paper Series from Center for Research in Economics, Management and the Arts (CREMA)

Abstract: By examining discrepancies between officially reported GDP growth figures and the actual economic growth implied by satellite-based night time light (NTL) density, we investigate whether democracies manipulate officially reported GDP figures, and if so, whether such manipulation pays political dividends. We find that the over-reporting of growth rates does indeed precede increases in popular support, with around a 1% over-statement associated with a 0.5% increase in voter intentions for the incumbent. These results are robust to allowing the elasticity of official GDP statistics to NTL to be country specific, as well as accounting for the quality of governance, and checks and balances on executive power.

Keywords: Manipulation; political entrenchment; electoral cycles; trust; popular support; GDP; night lights (search for similar items in EconPapers)
JEL-codes: D72 D73 O43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-big and nep-pol
Date: 2019-05
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