Statistical Manipulation: An Analysis of Potential Economic Data Tampering

Abstract

Information on a country’s economy is important for many parties, including domestic politicians, potential investors, and international financial institutions. However, an individual country’s official statistics are generated and published by the governing body, creating the opportunity for manipulation of these measures. Our research is based on the assumptions that all governments are incentivized to exaggerate economic metrics and that stricter measures on civil liberties, like speech and media, allow for this manipulation to remain. We identified two variables suitable for proxying economic growth, per capita Health Care Expenditure (HCE) and per person electricity consumption to compare to the stated economic data. We utilized a Fixed Effect-OLS regression to find the relationship between these proxy variables and Gross Domestic Product dependent on government type for 151 countries from 2000-2020. Our research revealed that, despite two government-type indicators, the relationship between electricity consumption and GDP was greater with more autocratic governments. This provides evidence to support that autocratic governments may manipulate their economic data. This research expands upon the literature on the role both corruption and government style have on GDP, as well as providing additional evidence that governments may have manipulated economic statistics.