Social Media Can Reduce Misinformation When Public Scrutiny is High

Misinformation poses a growing global threat to institutional trust, democratic stability, and public decision-making. While prior research has often portrayed social media as a channel for spreading falsehoods, less is known about the conditions under which it may instead constrain misinformation by enhancing transparency and accountability. Here we show this dual potential in the context of local governments' GDP reporting in China, where data falsifications are widespread. Analyzing official reports from 2011 to 2019, we find that local governments have overstated GDP on average. However, after adopting social media for public communications, the extent of misreporting declines significantly but only in regions where the public scrutiny over political matters is high. In such regions, social media increases the cost of misinformation by facilitating greater information disclosure and bottom-up monitoring. In contrast, in regions with low public scrutiny, adopting social media can exacerbate data manipulation. These findings challenge the prevailing view that social media primarily amplifies misinformation and instead highlight the importance of civic engagement as a moderating force. Our findings show a boundary condition for the spread of misinformation and offer insights for platform design and public policy aimed at promoting accuracy and institutional accountability.