Target Pressure and GDP Overreporting: Evidence from China's Poverty Alleviation Program

Abstract

This paper investigates the effect of China's 2020 poverty alleviation goal on GDP reporting in poverty-stricken counties. We adapt Martínez's (2022) model to estimate differences in GDP-nighttime light elasticity between poverty and non-poverty counties, assuming this elasticity should be consistent across all counties without manipulation. Our findings reveal significant GDP overreporting in poverty-stricken counties following the announcement of the 2020 goal. We estimate these counties inflated their GDP figures by approximately 23%, meaning that for every 1\% of actual economic growth, the officially reported GDP growth was about 1.23%. Event study analysis shows that overreporting increases as the target deadline approaches, suggesting escalating pressure on local officials to demonstrate performance. These results highlight the unintended consequences of top-down poverty alleviation targets and the potential for data manipulation in high-stakes policy environments.