Politicization of Intelligence Reporting: Evidence from the Cold War (Job Market Paper)

We examine whether there is systematic evidence that the US intelligence services pandered to their political masters when constructing intelligence estimates during the Cold War. We construct a model which shows how career concerns on the part of intelligence analysts could lead them to distort reports towards their president’s prior beliefs. We then take the model’s prediction that errors in intelligence reports should be correlated with presidential ideology, to the data by constructing a unique measure of intelligence failures that compares CIA/ORE reports on the Soviet strategic, nuclear arsenal to credible, post-Cold War estimates of the Soviet Union’s actual nuclear capabilities. We find that report errors are systematically, positively correlated with both a conventional measure of presidential ideology and a unique, text-based measure of presidential “hawkishness”. This result is robust to controlling for a number of endogeneity issues and alternative mechanisms such as reverse causality, variation in intersuperpower relations, collusion between politicians and the intelligence agencies, and turnover in agency staff. Finally, there is evidence that longer-term forecasts are more sensitive to ideology in a manner that is consistent with our model. (JEL: H56, L82, N42)