Information Manipulation and Reform in Authoritarian Regimes

We develop a theory of how an authoritarian regime interactively uses information manipulation, such as propaganda or censorship, and policy improvement to maintain social stability. The government can depict the status quo policy more popularly supported than it actually is, while at the same time please citizens directly by enacting a costly reform. We show that the government’s ability of making policy concessions reduces its incentive to manipulate information and improves its credibility. Anticipating a higher chance of policy concessions and less information manipulation, citizens are more likely to believe the government-provided information and support the regime. Our model provides an explanation for the puzzling fact that reform coexists with selective information disclosure in authoritarian countries like China.