the proper scope of government theory and an application to prisons when should a government provide a service in house and when should it contract out provision we develop a model in which the provider can invest in improving the quality of service or reducing cost if contracts are incomplete the private provider has a stronger incentive to engage in both quality improvement and cost reduction than a government employee has however the private contractor s incentive to engage in cost reduction is typically too strong because he ignores the adverse effect on noncontractible quality the model is applied to understanding the costs and benefits of prison privatization

media bias and influence evidence from newspaper endorsements this paper investigates the relationship between media bias and the inuence of the media on voting in the context of newspaper endorsements werst develop a simple econometric model in which voters choose candidates under uncertainty and rely on endorsements from better informed sources newspapers are potentially biased in favor of one of the candidates and voters thus rationally ac count for the credibility of any endorsements our primary empiricalnding is that endorsements are inuential in the sense that voters are more likely to support the recommended candidate after publication of the endorsement the degree of this inuence however depends upon the credibility of the endorsement in this way endorsements for the democratic candidate from left leaning news papers are less inuential than are endorsements from neutral or right leaning or newspapers and likewise for endorsements for the republican thesendings suggest that voters do rely on the media for information during campaigns but that the extent of this reliance depends upon the degree and direction of any bias

platform competition in two sided markets many if not most markets with network externalities are two sided to succeed platforms in industries such as software portals and media payment systems and the internet must get both sides of the market on board accordingly platforms devote much attention to their business model that is to how they court each side while making money overall this paper builds a model of platform competition with two sided markets it unveils the determinants of price allocation and end user surplus for different governance structures profit maximizing platforms and not for profit joint undertakings and compares the outcomes with those under an integrated monopolist and a ramsey planner jel l5 l82 l86 l96

plata o plomo bribe and punishment in a theory of political influence we present a model where groups attempt to influence policies using both bribes plata spanish for silver and the threat of punishment plomo spanish for lead we then use it to make predictions about the quality of a country s public officials and to understand the role of institutions granting politicians with immunity from legal prosecution the use of punishment lowers the returns from public office and reduces the incentives of high ability citizens to enter public life cheaper plomo and more resources subject to official discretion are associated with more frequent corruption and less able politicians this predicts that violence in a country will typically go together with corruption and worse politicians moreover the possibility of punishment changes the nature of the influence game so that even cheaper plata can lower the ability of public officials protecting officials from accusations of corruption immunity will decrease the frequency of corruption if the judiciary is weak and may increase the quality of politicians these predictions cannot emerge from a traditional model where only bribes are used the positive evils and dangers of the representative as of every other form of government may be reduced to two heads first general ignorance and incapacity or to speak more moderately insufficient mental qualifications in the controlling body secondly the danger of its being under the influence of interests not identical with the general welfare of the community

persistent media bias abstract the news media plays an essential role in society but surveys indicate that the public views the media as biased this paper presents a theory of media bias that originates with private information obtained by journalists through their investigations and persists despite profit maximizing news organizations and rivalry from other news organizations bias has two effects on the demand for news first rational individuals are more skeptical of potentially biased news and thus rely less on it in their decision making this skepticism reduces demand and leads the news organization to set a lower price for its publication the greater is the bias it tolerates lower quality news thus commands a lower price second bias makes certain stories more likely than others given their private information journalists may bias their stories if their career prospects can be advanced by being published on the front page news organizations can control bias by restricting the discretion allowed to journalists but granting discretion and tolerating bias can increase profits if it allows journalists to be hired at a lower wage bias is not driven from the market by a rival news organization nor by a news organization with an opposing bias and the profits of a high bias news organization can be higher than the profits of a low bias one moreover bias can be greater with competition than with a monopoly news organization if individuals collectively choose regulation in place of their individual decision making bias increases the expected stringency of regulation

information manipulation coordination and regime change this article presents a model of information manipulation and political regime change there is a regime that can be overthrown but only if enough citizens participate in an uprising citizens are imperfectly informed about the regime s ability to resist an uprising and the regime can engage in propaganda that taken at face value makes the regime seem stronger than it truly is this coordination game with endogenous information manipulation has a unique equilibrium and the article gives a complete analytic characterization of the equilibrium s comparative statics holding fixed the number of signals available to citizens if the per unit signal precision is sufficiently high then the regime is harder to overthrow in contrast if the number of signals increases so that both total signal precision and the regime s costs of manipulation rise together then the regime is easier to overthrow unless there are strong economies of scale in information control

press advertising and the ascent of the pensee unique the press industry depends in a crucial way on the possibility of financing an important fraction of its activities by advertising receipts we show that this induces the editors of newspapers to moderate in several cases the political message they display to their readers compared with the political opinions they would have expressed otherwise to this end we consider a three stage game in which editors select sequentially their political image the price of their newspaper and the advertising tariff they oppose to the advertisers the intuition of the result lies in the fact that editors have to sell tasteless political messages to their readers in order to sell a larger audience to the advertisers

why resource poor dictators allow freer media a theory and evidence from panel data every dictator dislikes free media yet many nondemocratic countries have partially free or almost free media in this article we develop a theory of media freedom in dictatorships and provide systematic statistical evidence in support of this theory in our model free media allow a dictator to provide incentives to bureaucrats and therefore to improve the quality of government the importance of this benefit varies with the natural resource endowment in resource rich countries bureaucratic incentives are less important for the dictator hence media freedom is less likely to emerge using panel data we show that controlling for country fixed effects media are less free in oil rich economies with the effect especially pronounced in nondemocratic regimes these results are robust to model specification and the inclusion of various controls including the level of economic development democracy country size size of government and others

a spatial theory of media slant and voter choice we develop a theory of media slant as a systematic filtering of political news that reduces multidimensional politics to the one dimensional space perceived by voters economic and political choices are interdependent in our theory expected electoral results influence economic choices and economic choices in turn influence voting behaviour in a two candidate election we show that media favouring the front runner will focus on issues unlikely to deliver a surprise while media favouring the underdog will gamble for resurrection we characterize the socially optimal slant and show that it coincides with the one favoured by the underdog under a variety of circumstances balanced media giving each issue equal coverage may be worse for voters than partisan media

political polarization and the electoral effects of media bias abstract we develop a model in which profits of media firms depend on their audience ratings and maximizing profits may involve catering to a partisan audience by suppressing information that the partisan audience does not like hearing while voters are rational understand the nature of the news suppression bias and update appropriately important information is lost through bias and can lead to electoral mistakes we characterize those conditions that give rise to electoral mistakes showing that heightened political polarization and asymmetric distributions of voter ideologies make electoral mistakes more likely even if the median ideology is a centrist and centrist voters gain access to unbiased news media bias can generate excessive cross over voting which in turn can lead to the election of the wrong candidate

government control of the media abstract we present a formal model of government control of the media to illuminate variation in media freedom across countries and over time media bias is greater and state ownership of the media more likely when the government has a particular interest in mobilizing citizens to take actions that further some political objective but are not necessarily in citizens individual best interest however the distinction between state and private media is smaller large advertising markets reduce media bias in both state and private media but increase the incentive for the government to nationalize private media media bias in state and private media markets diverge as governments become more democratic whereas media bias in democracies and autocracies converge as positive externalities from mobilization increase

when can a news organization lead public opinion ideology versus market forces in decisions to make news do news organizations purposefullylead the public to support a particularideological agenda when debating thisquestion many analysts draw conclusionsfrom weak empirical evidence we introducea model that clarifies how a newsorganization s internal structure combineswith market forces to affect when it canlead public opinion we identify conditionsunder which liberal reporters orpolitically driven media magnates canachieve ideological goals we alsoilluminate important barriers that preventmany would be public opinion leaders fromever satisfying these conditions we showthat internal structure and market forcesare critical determinants of any newsorganization s power over public opinion

the market for news we investigate the market for news under two assumptions that readers hold beliefs which they like to see confirmed and that newspapers can slant stories toward these beliefs we show that on the topics where readers share common beliefs one should not expect accuracy even from competitive media competition results in lower prices but common slanting toward reader biases on topics where reader beliefs diverge such as politically divisive issues however newspapers segment the market and slant toward extreme positions yet in the aggregate a reader with access to all news sources could get an unbiased perspective generally speaking reader heterogeneity is more important for accuracy in media than competition per se

labour supply with habit formation abstract in a model with habit forming labour supply we show that standard myopic utility maximisation of a person weakly addicted to a harmful habit is consistent with empirical results on labour supply

media freedom political knowledge and participation this paper examines the relationship between media freedom from government control and citizens political knowledge political participation and voter turnout to explore these connections i first examine media freedom and citizens political knowledge in thirteen central and eastern european countries with data from freedom house s freedom of the press report and the european commission s candidate countries eurobarometer survey next i consider media freedom and citizens political participation in 60 countries using data from the world values survey finally i investigate media freedom and voter turnout in these same 60 or so countries with data from the international institute for democracy and electoral assistance i find that where government owns a larger share of media outlets and infrastructure regulates the media industry more and does more to control the content of news citizens are more politically ignorant and apathetic where the media is less regulated and there is greater private ownership in the media industry citizens are more politically knowledgeable and active these results are robust to sample specification and alternative measures of media freedom

fighting corruption to improve schooling evidence from a newspaper campaign in uganda what are the most effective ways to increase primary school enrollment and student learning we argue that innovations in governance of social services may yield the highest return since social service delivery in developing countries is often plagued by inefficiencies and corruption we illustrate this by using data from an unusual policy experiment a newspaper campaign in uganda aimed at reducing capture of public funds by providing schools parents with information to monitor local officials handling of a large education grant program the campaign was highly successful and the reduction in capture had a positive effect on enrollment and student learning jel d73 i22 o12

estimation of elasticity price of electricity with incomplete information abstract the sharp increase in energy prices and growing concern for environmental issues among other things are behind the renewed interest in energy demand estimation however there is scarce academic literature that takes real situation of energy suppliers into account high quality but incomplete data in this paper we propose a useful and rather simple instrument for estimating electricity demand with the incomplete and or imperfect data currently available to suppliers in particular using real expenditure and consumption data on electricity we employ a model of random effects for panel data to estimate residential and industrial electricity demand in spain

a free press is bad news for corruption abstract this paper tests the proposition that a free press may be a powerful control on corruption we find evidence of a significant relationship between more press freedom and less corruption in a large cross section of countries this result is robust to specification and sample and the relationship is not sensitive to the choice of a particular measure of corruption or of press freedom furthermore we present evidence which suggests that the direction of causation runs from higher press freedom to lower corruption

mass media competition political competition and public policy if better informed voters receive favourable policies then mass media will affect policy because mass media provide most of the information people use in voting this paper models the incentives of the media to deliver news to different groups the increasing returns to scale technology and advertising financing of media firms induce them to provide more news to large groups such as taxpayers and dispersed consumer interests and groups that are valuable to advertisers this news bias alters the tradeoff in political competition and therefore introduces a bias in public policy the paper also discusses the effects of broadcast media replacing newspapers as the main information source about politics the model predicts that this change should raise spending on government programmes used by poor and rural voters

who owns the media the authors examine patterns of media ownership in 97 countries around the world they find that almost universally the largest media firms are controlled by the government or by private families government ownership is more pervasive in broadcasting than in the printed media government ownership is generally associated with less press freedom fewer political and economic rights inferior governance and most conspicuously inferior social outcomes in education and health the adverse effects of government ownership on political and economic freedom are stronger for newspapers than for television the adverse effects of government ownership of the media do not appear to be restricted solely to instances of government monopoly the authors present a range of evidence on the adverse consequences of state ownership of the media state ownership of the media is often argued to be justified on behalf of the social needs of the disadvantaged but if their findings are correct increasing private ownership of the media through privatization or by encouraging the entry of privately owned media can advance a variety of political and economic goals especially those of meeting the social needs of the poor

does voluntary participation undermine the coase theorem abstract the coase theorem states that costless enforcement of voluntary agreements yields efficient outcomes we argue that previous treatments fail to recognize the full meaning of voluntary it requires a two stage game a non cooperative participation decision followed by coaseian bargaining only among those who choose to participate we illustrate this in a simple public goods model and find outcomes ranging from extremely inefficient to fully efficient however the efficient equilibrium is not robust to even very small transaction costs thus we cast doubt on coaseian claims of universal efficiency finally we outline a kind of coercion that restores efficiency