Government Advertising and Media Coverage of Corruption Scandals

The media plays an important role in modern democracies. For example, it provides a large proportion of the information with which policymakers and voters make decisions, as well as analysis and editorial content that may influence the conclusions reached by potential voters (see, for example, Walter Lippmann 1922). Understandably, the possibility that there is bias in the media has worried economists, as well as many social and political commentators on both sides of the political spectrum (see, for example, Bernard Goldberg 2001 and Eric Alterman 2003). A recent literature has developed different measures of media bias and analyzed how they might behave in equilibrium. Beyond the possibility of ideological influences, some have worried that financial motivations of media companies might lead them to bias their content in exchange for advertisement or other type of transfers (see, for example, James Hamilton 2004; Jonathan Reuter and Eric Zitzewitz 2006). Given that in many settings the government is the largest advertiser in the media, this