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Media versus Special Interests

Author

Listed:
  • Dyck, Alexander
  • Moss, David
  • Zingales, Luigi

Abstract

We argue that profit-maximizing media help overcome the problem of "rational ignorance" highlighted by Downs (1957) and in so doing make elected representatives more sensitive to the interests of general voters. By collecting news and combining it with entertainment, media are able to inform passive voters on politically relevant issues. To show the impact this information has on legislative outcomes, we document the effect "muckraking" magazines had on the voting patterns of U.S. representatives and senators in the early part of the 20th century. We also show under what conditions profit-maximizing media will cater to general (less affluent) voters in their coverage, providing a counterbalance to special interests.

Suggested Citation

  • Dyck, Alexander & Moss, David & Zingales, Luigi, 2008. "Media versus Special Interests," CEPR Discussion Papers 6994, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6994
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    References listed on IDEAS

    as
    1. Djankov, Simeon & et al, 2003. "Who Owns the Media?," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 341-381, October.
    2. Alexander Dyck & Natalya Volchkova & Luigi Zingales, 2008. "The Corporate Governance Role of the Media: Evidence from Russia," Journal of Finance, American Finance Association, vol. 63(3), pages 1093-1135, June.
    3. Gary S. Becker & Kevin M. Murphy, 1993. "A Simple Theory of Advertising as a Good or Bad," The Quarterly Journal of Economics, Oxford University Press, vol. 108(4), pages 941-964.
    4. Marc Law & Gary D. Libecap, 2006. "The Determinants of Progressive Era Reform. The Pure Food and Drugs Act of 1906," NBER Chapters,in: Corruption and Reform: Lessons from America's Economic History, pages 319-342 National Bureau of Economic Research, Inc.
    5. Lisa M. George & Joel Waldfogel, 2006. "The New York Times and the Market for Local Newspapers," American Economic Review, American Economic Association, vol. 96(1), pages 435-447, March.
    6. Timothy Besley & Robin Burgess, 2002. "The Political Economy of Government Responsiveness: Theory and Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1415-1451.
    7. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    8. Stefano DellaVigna & Ethan Kaplan, 2007. "The Fox News Effect: Media Bias and Voting," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1187-1234.
    9. Edward L. Glaeser & Claudia Goldin, 2006. "Corruption and Reform: Lessons from America's Economic History," NBER Books, National Bureau of Economic Research, Inc, number glae06-1, June.
    10. Timothy Besley & Andrea Prat, 2006. "Handcuffs for the Grabbing Hand? Media Capture and Government Accountability," American Economic Review, American Economic Association, vol. 96(3), pages 720-736, June.
    11. Matthew Gentzkow & Jesse M. Shapiro, 2006. "Media Bias and Reputation," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 280-316, April.
    12. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    13. David P. Baron, 2005. "Competing for the Public Through the News Media," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 339-376, June.
    14. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 265-286.
    15. Jonathan Reuter & Eric Zitzewitz, 2006. "Do Ads Influence Editors? Advertising and Bias in the Financial Media," The Quarterly Journal of Economics, Oxford University Press, vol. 121(1), pages 197-227.
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    Citations

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    Cited by:

    1. Strömberg, David, 2015. "Media Coverage and Political Accountability: Theory and Evidence," CEPR Discussion Papers 10638, C.E.P.R. Discussion Papers.
    2. repec:hrv:faseco:33077931 is not listed on IDEAS
    3. repec:bla:econom:v:84:y:2017:i:335:p:393-416 is not listed on IDEAS
    4. repec:eee:jbfina:v:87:y:2018:i:c:p:68-86 is not listed on IDEAS
    5. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2010. "Disclosure by Politicians," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 179-209, April.
    6. Karen Moris, 2010. "La presse en tant que mécanisme de gouvernance disciplinaire - Press as a disciplinary governance mechanism," Working Papers CREGO 1101003, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.
    7. repec:eee:jbfina:v:87:y:2018:i:c:p:1-25 is not listed on IDEAS
    8. Eiji Yamamura & Fabio Sabatini, 2014. "Superstars in politics: the role of the media in the rise and success of Junichiro Koizumi," Papers 1407.1726, arXiv.org.
    9. Garcia Pires, Armando J., 2014. "Media diversity, advertising, and adaptation of news to readers’ political preferences," Information Economics and Policy, Elsevier, vol. 28(C), pages 28-38.
    10. repec:eee:corfin:v:46:y:2017:i:c:p:139-153 is not listed on IDEAS
    11. Alexander Dyck & Natalya Volchkova & Luigi Zingales, 2008. "The Corporate Governance Role of the Media: Evidence from Russia," Journal of Finance, American Finance Association, vol. 63(3), pages 1093-1135, June.
    12. Shapiro, Jesse M., 2016. "Special interests and the media: Theory and an application to climate change," Journal of Public Economics, Elsevier, vol. 144(C), pages 91-108.
    13. repec:ces:ifodic:v:11:y:2014:i:4:p:19105947 is not listed on IDEAS
    14. repec:kap:ejlwec:v:43:y:2017:i:2:d:10.1007_s10657-016-9548-x is not listed on IDEAS
    15. Yamamura, Eiji & Sabatini, Fabio, 2015. "The impact of the media on voters’ attitude toward Junichiro Koizumi and his policy," Japan and the World Economy, Elsevier, vol. 34, pages 24-32.
    16. Florian Buck, 2014. "Financial Regulation and the Grabbing Hand," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(4), pages 03-13, 01.
    17. Poitras, Marc & Sutter, Daniel, 2009. "Advertiser pressure and control of the news: The decline of muckraking revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 944-958, December.

    More about this item

    Keywords

    media; muckraking; regulation;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • N41 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: Pre-1913
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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