1 Mass media and political economics -- 2 Collective decision-making and market provision of information -- 3 Public good provision, electoral selection and informationacquisition -- 4 Theory and evidence from Norway: Newspaper circulationand local government efficiency -- 5 The geography of local television markets and the allocationof federal funds in the United States -- 6 Concluding remarks -- 7 References
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Politicians seeking reelection need voters to know what they have done for them. Thus, incentives may arise to spend more money where media coverage is higher. We present a simple model to explain the allocation of public spending across jurisdictions contingent on media activity. An incumbent seeking to maximize the probability of reelection will shift more money to jurisdictions where an extra dollar gains more votes because a larger share of the electorate is informed about his policy. This prediction is tested using US data on county-level public spending, Designated Market Areas (DMAs) and location of licensed television stations. Instrumenting for the possible endogeneity of media activity to public spending, 2SLS results confirm a positive effect of media coverage on county-level public spending. Spatial regression rules out the possibility of confounding media effects with spatial autocorrelation.
Politicians seeking reelection need voters to know what they have done for them. Thus, incentives may arise to spend more money where media coverage is higher.We present a simple model to explain the allocation of public spending across jurisdictions contingent on media activity. A politician seeking to maximize the probability of reelection will shift more money to jurisdictions where an extra dollar raises more votes because a larger share of the electorate is informed about his policy. The main prediction of the model is that media activity is higher in the core areas of media markets. This implies higher spending levels there and lower spending levels in remote jurisdictions. Empirical support for this prediction is found using United States data on county-level federal grant allocation, Designated Market Areas and the location of licensed television stations. ; peerReviewed
Politicians seeking reelection need voters to know what they have done for them. Thus, incentives may arise to spend more money where media coverage is higher. We present a simple model to explain the allocation of public spending across jurisdictions contingent on media activity. An incumbent seeking to maximize the probability of reelection will shift more money to jurisdictions where an extra dollar gains more votes because a larger share of the electorate is informed about his policy. This prediction is tested using US data on county-level public spending, Designated Market Areas (DMAs) and location of licensed television stations. Instrumenting for the possible endogeneity of media activity to public spending, 2SLS results confirm a positive effect of media coverage on county-level public spending. Spatial regression rules out the possibility of confounding media effects with spatial autocorrelation.
We show that a large electorate of ignorant voters can succeed in establishing high levels of electoral accountability. In our model an incumbent politician is confronted with a large number of voters who receive very noisy signals about her performance. We find that the accountability problem can be solved well in the sense that the incumbent exerts effort as if she faced a social planner who receives a perfect signal about her performance. Our results thus shed light on another potential blessing of large electorates in addition to information aggregation as postulated by the jury theorem.