1. Transparency & Investment Matt Clore and Michael McGrath

2. Do domestic investors look to government economic data, as reported by international institutions, when determining how much to invest? Question

3. Debate Why do governments engage international institutions? – Credible signals to constituents (Mansfield, Milner, Rosendorff, ‘02) – Accessibility and comparability (Copelovitch, Gandrud, Hallerberg, ’15) Do investors use this signal in the domestic context? -Foreign direct investment (Drabek ‘99, Shen&Silwinski ‘14) -Sovereign debt (Copelovitch et al)

4. Hypothesis Positive correlation between transparent economic reporting and domestic investment

5. Y = Gross Capital Formation (gross domestic investment) – Outlays on additions to the fixed assets of the economy plus net changes in the level of inventories (WDI) X = HRV Index - Bayesian Item Response - 240 WDI variables - 125 countries; 1980-2010 - Alternative to Freedom House Index Methodology

6. Evidence

9. Why does this occur? What other theories are there? Robustness Check: Financial Regulatory Transparency (FRT) Index? Under what conditions does investment not increase? Additional Control Variables? Questions Going Forward

10. An increase in transparency is statistically highly significant with gross domestic investment. Takeaway