Local government transparency across the election cycle: Do text and numbers tell the same story?
研究瑞典市政年度报告发现，选举年发布的报告文本情感更积极，与财务表现脱节，尤其业绩差的市政更倾向用积极文本掩盖负面结果，提醒利益相关者选举期间需谨慎解读文本信息。
This study examines how political pressure, as proxied by the election cycle, influences the alignment between textual sentiment and financial performance in municipal annual reports. Based on nearly 4000 reports prepared by Swedish municipalities (2010–2023), we apply sentiment analysis and fixed effects regression models. We find that textual sentiment is generally associated with financial performance. However, we also document a clear election cycle effect: reports for pre-election years − issued during election years, when political pressure is presumably at its peak − exhibit more positive sentiment regardless of financial performance. This effect is partly driven by municipalities with relatively poor performance, suggesting that textual disclosures are used to downplay negative outcomes when political stakes are high. By documenting how the reliability of textual information shifts under political pressure, our study contributes to research on government financial transparency and highlights the need for stakeholder caution when interpreting textual information during election periods.