Misunderstanding and misplaced confidence in a Japanese survey experiment: government financial reporting,content explanation,and participation

Abstract

An online panel survey experiment tested whether ‘content explanation’ improved the understanding of government financial reporting, and explored its relationship to participation. This is situated within a literature examining transparency, understanding, and engagement. A representative Japanese sample of 1400 was divided into control and treatment groups of 700. Each was provided with fictional financial reports of a local government, either with (treatment) or without (control) attached explanations of reporting concepts used. Testing eight hypotheses, we found explaining the concepts used did not improve the subjective (perceived) or objective (actual) understanding of the reports. Perceived understanding of accounting was not associated with actual understanding of the reports. Both objective and subjective understanding of reports was associated with types of participation. We found those with less actual understanding of government reports claimed a greater understanding and confidence in that understanding, consistent with a Dunning–Kruger effect found in other literature.

Points for practitioners

We are interested in the relationship between the provision and transparency of government information, understanding of that information, and political and social participation.

A number of previous studies suggest that explaining the concepts used in government financial reporting improves understanding in citizens.

Our larger representative sample with greater validly finds that this not the case, and that explaining concepts does not improve understanding.

Often those who understand government reports less are more confident that they do understand the reports. This is called a Dunning–Kruger effect.

The relationship between actual understanding of government reports and social and political participation is complicated, with some types of participation related to actual understanding. Some perceived understanding is also related to participation.

Claims that providing and explaining government reporting information leads to greater understanding and participation are not generally supported by our experimental study.

Keywords

Dunning–Kruger effect government financial reporting participation transparency

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