Commercial Television and Voter Information

What is the e¤ect of liberalizing a country’s broadcasting system on the level of information of its citizens? To analyze this question, we …rst construct a model of state monopoly broadcasting where the government selects the amount of television news coverage of di¤erent public policy outcomes, and then sets public policy and political rents. Voters vote retrospectively given the news provided. In equilibrium, the incumbent provides some news coverage, and more so to groups for which reducing policy uncertainty is more important. We then introduce a pro…t-maximizing commercial channel. It provides more news coverage to groups of voters valuable to advertisers or underprovided by the state monopoly. We test our predictions on a panel of individuals interviewed in the elections before and after the entry of commercial TV in Sweden. We …nd that people who start watching commercial TV news increase their level of political knowledge more than those who do not. They also increase their political participation more. The positive informational e¤ects are particularly valuable since commercial TV news attracts ex ante uniformed voters. In most countries the state is the dominant provider of television programs. The most notable exception is the United States in which the …ve largest channels are all privately owned (Djankov et al. [7]). While state television plays an important, it is not as important as it was in the past. In 1980 all European countries had state TV monopolies, except for Britain and Italy (with dual systems) and Luxembourg (all commercial). There were seven times as many public channels as private. By 1997 the balance was reversed: only three countries had purely public national channels (Austria, Ireland, and Switzerland), and commercial channels outnumbered public. We thank Tim Besley, Jordi Blanes, Peter Davis, Torsten Persson, Justin Wolfers, and audiences at Bristol (Political Economy Workshop), London Metropolitan University, the LSE, Penn (IGIER-PIER Conference on Political Economics), Stanford (Conference on the Media and Economic Performance), and Toulouse (Conference on the Regulation of Media Markets) for useful comments. Andrea Prat gratefully acknowledges ESRC grant Res-000-22-1224.