The title of the film comes from the English-language idiom "the tail wagging the dog",[3] used to indicate attention that is purposely being diverted from something of greater importance to something of lesser.

Wag the Dog was released one month before the news broke of the Clinton–Lewinsky scandal and the bombing of the Al-Shifa pharmaceutical factory in Sudan by the Clinton administration in August 1998, which prompted the media to draw comparisons between the film and reality.

[5] It was made again in spring 1999, when the administration intervened in the Kosovo War and initiated a bombing campaign against Yugoslavia, which, coincidentally, bordered Albania and contained ethnic Albanians.

Brean contacts Hollywood producer Stanley Motss to create the war, complete with a theme song and fake film footage of a fleeing orphan to arouse sympathy.

Soon, large numbers begin appearing on phone and power lines, and a grassroots movement to bring Schumann home takes hold, completing a successful astroturfing.

Seizing the opportunity, Motss stages an elaborate military funeral for Schumann, claiming he died from wounds sustained during his rescue, and the farmer receives expedited citizenship for a better story.

A newscast reports that Motss has died of a heart attack at home, the president has been successfully re-elected, and an Albanian terrorist organization has claimed responsibility for a recent bombing, suggesting the fake war is becoming real.

After Levinson became attached as director, David Mamet was hired to rewrite Hilary Henkin's screenplay, which was loosely adapted from Larry Beinhart's novel, American Hero.

The site's critical consensus reads: "Smart, well-acted, and uncomfortably prescient political satire from director Barry Levinson and an all-star cast.

"[14] On Metacritic, which assigns a weighted average rating, the film holds a score of 74 out of 100, based on 22 critics, indicating "generally favorable reviews".

[31] On April 27, 2017, Deadline reported that Barry Levinson, Robert De Niro and Tom Fontana were developing a television series based on the film for HBO.