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The Sound of Silence: Anti-Defamation Law and Political Corruption

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  • Gabriele Gratton

    ()
    (School of Economics, The University of New South Wales)

Abstract

Voters use the press to keep politicians accountable. By endogenizing the response of the voters, this paper provides a theoretical foundation to disentangle the effects of media regulation on corruption and clarify under which circumstances regulation reduces or increases corruption. The analysis shows that libel laws can reduce political corruption only if the moral hazard problem dominates adverse selection and the punishment for the defamer is large enough to deter the publication of well-founded scandals. In this case, libel laws act as a substitute for an optimal re-election rule to which voters commit ex ante.

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File URL: http://research.economics.unsw.edu.au/RePEc/papers/2012-21.pdf
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Bibliographic Info

Paper provided by School of Economics, The University of New South Wales in its series Discussion Papers with number 2012-21A.

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Length: 37 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:swe:wpaper:2012-21a

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Keywords: media and democracy; corruption; defamation; chilling effect.;

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  1. Suphachol Suphachalasai, 2005. "Bureaucratic Corruption and Mass Media," Public Economics 0502014, EconWPA.
  2. Drago, Francesco & Nannicini, Tommaso & Sobbrio, Francesco, 2013. "Meet the Press: How Voters and Politicians Respond to Newspaper Entry and Exit," IZA Discussion Papers 7169, Institute for the Study of Labor (IZA).
  3. Goltsman, Maria & Hörner, Johannes & Pavlov, Gregory & Squintani, Francesco, 2009. "Mediation, arbitration and negotiation," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1397-1420, July.
  4. Ferraz, Claudio & Finan, Frederico S., 2007. "Exposing Corrupt Politicians: The Effects of Brazil’s Publicly Released Audits on Electoral Outcomes," IZA Discussion Papers 2836, Institute for the Study of Labor (IZA).
  5. Freille, Sebastian & Haque, M. Emranul & Kneller, Richard, 2007. "A contribution to the empirics of press freedom and corruption," European Journal of Political Economy, Elsevier, vol. 23(4), pages 838-862, December.
  6. Tirole, Jean, 1986. "Hierarchies and Bureaucracies: On the Role of Collusion in Organizations," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(2), pages 181-214, Fall.
  7. Warren, Patrick L., 2012. "Independent auditors, bias, and political agency," Journal of Public Economics, Elsevier, vol. 96(1), pages 78-88.
  8. Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August.
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