1/14/2020

The Simple Economics of Comparative State Lying

"As rumors of war smoulder, the question becomes even more important: Between two states who issue contradictory statements, which one is it safer to believe? The economic answer is, of course, the one that has the lowest incentives to lie. Keep in mind that states don’t lie, only their rulers do, and we know that it is often in their interest to, but the question remains. Answering it is not difficult, at least in some cases.

In a free or just open society, the incentive for rulers to lie is much lower, because the probability that the liar will be denounced and perhaps punished is higher."