Do countries falsify economic data strategically? Some evidence that they might.

Gilles Stoltz (1, 2, 3) , Tomasz Michalski (2)

1 DMA - Département de Mathématiques et Applications - ENS Paris
2 GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC
3 CLASSIC - Computational Learning, Aggregation, Supervised Statistical, Inference, and Classification

Using Benford's law, we find evidence supporting the hypothesis that countries at times misreport their economic data strategically. We group countries with similar economic conditions and find that for countries with fixed exchange rate regimes, high negative net foreign asset positions or negative current account balances, we reject the first-digit law for balance of payments data. This corroborates the intuition of a simple economic model. Countries with bad institutional quality rankings (though these seem not to be responsible for our other findings) release economic data of questionable veracity.

Mots clés: capital flows; public information provision; misinformation; Benford's law; transparency

Domaines: Economies et finances; Applications [stat.AP]

Gilles Stoltz, Tomasz Michalski. Do countries falsify economic data strategically? Some evidence that they might.. 2010. ⟨halshs-00482106v2⟩