Bureaucrats who falsify economic data are more likely to win promotion.
In theory Chinese officials receive promotions based on their performance against a range of targets: delivering strong growth, maintaining social stability and, until recently, enforcing the one-child policy have been the most important. But scholars debate the extent to which the system really does reward those who excel according to these (in any case flawed) metrics. Some believe the emphasis on merit is real, and helps explain the country’s stunning economic progess over the past 35 years, albeit at the cost of things that count for less in appraisals, such as clean air. Others reckon that connections to the right leaders matter more for those trying to advance their careers. New research, however, suggests a third option: that those who get ahead are adept not at stimulating growth nor at currying favour, but at cooking the books.
A recent paper from America’s National Bureau of Economic Research uses fertility rates as a way to test this theory. Economists have found a relationship between GDP growth in an official’s fiefdom and subsequent promotion, but it is difficult to know how accurate the GDP figures are (a question that haunts anyone following the Chinese economy). Population data are different: in addition to the figures provided by local officials, China conducts a census every ten years, revising population data all the way down to the village level. That makes it possible to see where bureaucrats have been fiddling the statistics—something impossible to do with GDP.
The Economist