The Information Environment and the Accuracy of Economic Sentiment

• In Event: Economic and Political Performance in Developing Democracies

Abstract

Public evaluations of the economy are key for understanding how citizens assess system performance and vote in elections. But despite their importance, we still have much to learn about what drives these evaluations. In this article, we argue that an overlooked source of variation in economic perceptions is the information environment. In high-quality information environments where the government is transparent, the media is free, and political opposition is robust, public perceptions are closely informed by economic reality. Compromised information environments, however, provide an opening for political manipulation, leading perceptions to deviate from business cycle fluctuations. We test our argument with aggregate data from eight Latin American countries. Results show the public has distorted views of economic performance when access to information is restricted. Our findings suggest that the ability of voters to sanction governments is stronger when democratic institutions and the media protect citizens’ access to independent, unbiased information.

Authors

• Ryan Carlin, Georgia State University

• Gregory Love, University of Mississippi

• Cecilia Martinez-Gallardo, University of North Carolina, Chapel Hill

• Matthew Singer, University of Connecticut

• Timothy Hellwig, Indiana University, Bloomington