In the run-up to elections, the tone of Swedish municipalities' annual reports becomes more positive, regardless of the actual state of the economy. A new study from the University of Gothenburg shows that political pressure can influence how financial results are presented in writing.
The researchers examined the relationship between the language used in annual reports and municipalities’ financial performance. The results show that, in general, the tone of the reports reflects economic reality; however, the link between text and figures weakens during election periods.
"When political pressure is at its highest, there is an increased risk that reality will be presented in a more favourable light. It is problematic that this happens precisely when voters are deciding how to vote. The language used can influence voters, the media and, ultimately, election outcomes,” says Emmeli Runesson, an accounting researcher at School of Business, Economics and Law at the University of Gothenburg.
Municipalities with weaker finances embellish the most
Together with Pierre Donatella, Associate Professor of Public Administration at the University of Gothenburg, she analysed 4,000 annual reports from 289 Swedish municipalities between 2010 and 2023. Embellished language was particularly evident in municipalities with weaker financial results. There, the tone deviates most from actual developments.
"Ahead of elections, we see that the language becomes more positive, even in municipalities where the economy is relatively weak. Descriptive texts are used to downplay negative results shown by the figures,” says Emmeli Runesson.
Language can influence election outcomes
Annual reports are a key tool for transparency in public administration. However, many of those who read these reports lack financial expertise, meaning they may rely heavily on the way financial results are described in the text.
"Transparency is not only about which figures are reported, but also how they are described. Our study shows that annual reports should be read with greater caution during election years," says Emmeli.
