Enforcing discipline in China: Countering internal misinformation with public disclosure

Governments around the world need internal discipline to ensure the implementation of policies and delivery of governance outputs, and this need is more severe in authoritarian systems that govern top-down and without bottom-up electoral pressures. Conventional wisdom suggests that autocrats rely on punishment to discipline subordinates who fail to obey orders, but we argue that public disclosure of such malfeasance can also be effective, even when unaccompanied by punishment. In the case of internal misinformation—the tampering of government data and statistics by local agents to distort central authorities’ decisions—we find that the Chinese government successfully adopted public disclosure to combat the manipulation of local GDP numbers by lower-level governments. Our evidence indicates that publicly disclosing a prior act of falsification reduced future manipulation and did so at various levels of local governments, even as officials implicated by the disclosure faced no career setbacks. Hinting at downstream impacts, such disclosure also improved confidence among economic actors, evidenced by increased business activity in localities involved in public disclosures.