Democracy, transparency, and the production of official statistics

Abstract We examine whether democracy affects the quality of official statistics by focusing on historically colonized countries. To address endogeneity concerns, we use historical settler mortality as an instrument, following the logic that settler mortality shaped colonial settlement strategies and long-run institutional development, including democratic institutions. This approach estimates the democracy–statistical quality relationship among the complier group—colonies whose democratic trajectories were influenced by settler mortality—while recognizing that settler mortality may also capture broader colonial institutional legacies. This complier group is policy-relevant because many post-colonial states continue to face state-capacity and data quality challenges, making it especially important to understand whether democratic institutions may help improve official statistics. Using cross-sectional data from 2023, combining the Economist Intelligence Unit’s Democracy Index and the World Bank’s Statistical Performance Indicators overall index, we estimate that a one-unit increase in democracy is associated with a 5.3–6.2-point increase in the quality of official statistics. We further find suggestive evidence that this estimated relationship is heterogeneous: it is about 3.7 points larger in common-law countries and 3.6 points smaller in civil-law countries, suggesting that colonial legal traditions may make democracy’s relationship with statistical quality stronger in some countries and weaker in others.