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Home Press Center Press Releases Study Finds Economists' Allegations of Fraud in Venezuelan Referendum to Be Groundless

Study Finds Economists' Allegations of Fraud in Venezuelan Referendum to Be Groundless

Study Finds Economists' Allegations of Fraud in Venezuelan Referendum to Be Groundless

Results Concur With Carter Center's (September 17) Review of Audit Procedures

For Immediate Release: September 20, 2004 

Contact: Debi Kar, 202- 387-5080  

On September 3, economists Ricardo Hausmann of Harvard University's Kennedy School of Government, and Roberto Rigobon of the M.I.T. Sloan School of Management, presented econometric results that the authors maintain are evidence of fraud in Venezuela's August 15 recall referendum. The paper was reported by four major international news outlets and was used to raise doubts about the validity of the referendum among U.S. legislators and policy-makers. It was also used to support claims of fraud by opposition leaders in Venezuela.

A new paper by the Center for Economic and Policy Research examines the results presented by Hausmann and Rigobon and finds that they provide no evidence of fraud. This concurs with the findings of the Carter Center (September 17), showing that the sample selected on August 18 for an audit of the vote that they observed, was indeed a random sample of all voting centers, and that electronic fraud of the type suggested by Hausmann and Rigobon was therefore impossible.

A copy of the full report by the Center for Economic and Policy Research, "Black Swans, Conspiracy Theories, and the Quixotic Search for Fraud: A Look at Hausmann and Rigobon's Analysis of Venezuela's Referendum Vote", written by Mark Weisbrot, David Rosnick and Todd Tucker, can be obtained here.

BACKGROUND:

In this referendum voters expressed their preference (YES or NO) with a touch screen voting machine. The machine then printed out a paper ballot with the voter's choice, which voters deposited in a ballot box. The audit of 150 voting centers, observed and certified by the Carter Center and the OAS, found that the paper ballots matched the electronic votes within a 0.1 percent margin.

However, Hausmann and Rigobon put forth a theory of electronic fraud that was consistent with a clean audit. According to their illustrative example, suppose the machines were rigged at 3000 polling centers, and the remaining 1580 were randomly selected to be left clean. If the computer program that generated the sample could be fixed to sample only from the clean centers, the electronic votes would match the paper ballots in the audit -- in spite of the fraud.

The authors then present two sets of evidence which they claim indicates that fraud of this type took place.

The main problem with their analysis is that, according to their assumptions, the audited sample of 150 voting sites should reflect the true -- that is, non-fraudulent -- referendum result. Such a large sample provides incontrovertible evidence of the validity of the official results, which were well within the range that would be expected given the results found in the audited sample.

By contrast, the exit poll used by Hausmann and Rigobon, published by the American polling firm Penn, Schoen, Berland & Associates found that 59 percent of voters were in favor of the recall (YES), and 41 percent opposed (NO). This was the opposite of the official results certified by the Carter Center and the Organization of American States, in which voters rejected the recall by a margin of 59 percent (NO) to 41 percent (YES).

But the audited sample had only 41.6 percent YES votes. This paper finds that:

· The chances of getting an audited sample, under Hausmann and Rigobon's assumptions of how it was selected, of 41.6 percent YES, if the true (non-fraudulent) vote were 59 percent YES, are less than one in 28 billion trillion.
· Even if the true vote had the recall barely succeeding with only 50.1 percent YES, the chances of getting an audited sample of 41.6 percent YES are less than one in a million.

This paper also examines the other statistical evidence presented by Hausmann and Rigobon to support their theory of electronic fraud and finds that it is dependent on implausible assumptions. We conclude that the results that they interpret as evidence of fraud most likely stem from a misspecification in their econometric model.

This issue extends beyond Venezuela, where opposition leaders -- including those that control most of the media -- have continued to question the results of the referendum. Most importantly, it has considerable implications for the effectiveness of international monitoring in elections. This was one of the most carefully monitored elections in modern history, with both the Carter Center and the Organization of American States playing a major role.

If this level of monitoring and verification by some of the most experienced election observers in the world, in a case where the election was not even close, cannot produce a credible result, then the whole system of international monitoring would have to be called into question. Fortunately this is not the case, as the statistical evidence of electronic fraud in the referendum has turned out not to be valid.

 

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