← Search

The Review of Economics and Statistics Vol. 95 No. 2 2013

Do Countries Falsify Economic Data Strategically? Some Evidence That They Might

Tomasz Michalski1; Gilles Stoltz2,3,4,5,1

1 HEC Paris · 2 Centre National de la Recherche Scientifique · 3 Institut national de recherche en sciences et technologies du numérique · 4 École Normale Supérieure · 5 HEC Paris in Qatar

Abstract

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, negative current account balances, or more vulnerable to capital flow reversals, we reject the first-digit law for the balance-of-payments data. This corroborates the intuition of a simple economic model. The main results do not seem to be driven by countries in sub-Saharan Africa or those with low institutional quality ratings.

DOI
10.1162/rest_a_00274
Volume
95
Issue
2
Pages
591-616
Language
en
Sources
crossref openalex

Cite