News Media Incentives, Coverage of Government, and the Growth of Government

By Sutter, Daniel | Independent Review, Spring 2004 | Go to article overview

News Media Incentives, Coverage of Government, and the Growth of Government


Sutter, Daniel, Independent Review


Both the form and the content of the news industry changed dramatically in the twentieth century. Americans at the end of the nineteenth century received news from newspapers that, although no longer funded by political parties, typically were openly political in their coverage. Today Americans receive news through new media--radio, television, and the Internet--and from news organizations that strive for fairness and balance in reporting, journalism today relegates political partisanship to the op-ed pages of newspapers and to commentaries and interview programs on television.

Also in the twentieth century, government grew dramatically in the United States and other industrial countries. Federal spending in the United States grew from 3 percent of gross domestic product in 1900 to more than 20 percent by the 1970s. Robert Higgs (1987) argues that the growth of the U.S. government cannot be understood without considering the ideological shift in how citizens viewed the role of government in society. Both F. A. Hayek (1967) and Ludwig von Mises (1956) noted the hostility of intellectuals as a class to capitalism. Given the media's role as intermediaries in the market for information and ideas, one cannot help but wonder about file possible role that the news media might have played in the growth of government.

Explicit liberal bias on the part of reporters or media outlet owners provides one reason why media coverage might increase the size of government. In this case, the news media directly pursue their political agenda. Liberal bias has generated a great deal of attention over the past several decades, and media watchdog groups such as Accuracy in Media and the Media Research Center attempt to document and publicize the media's alleged liberal bias. Partisan bias, however, is not the type of bias favoring large government that I consider here. Instead, I examine whether the news media or news-gathering techniques indirectly and perhaps inadvertently favor the growth of government. Journalism scholars have demonstrated how methods of news gathering affect news content (Bennett 1996; Tuchman 1978). News production decisions, such as the assignment of reporters and camera crews and the location of news bureaus, shape the content of news coverage in subtle but significant ways. I examine whether elements of reporting or general economic incentives of for-profit media lead news organizations to promote the expansion (or maintenance) of government.

The types of bias examined in this article are a by-product of profit maximization or adherence to the canons of journalism, in contrast to intentional liberal bias. Indeed, even a news organization owned and staffed by conservatives may contribute to the growth of government through one of these by-product mechanisms. Direct bias tends to reduce the audience and revenues of news organizations, giving profit-maximizing owners an incentive to check it (Sutter 2001), whereas indirect, by-product bias may well go unnoticed and unchecked.

I proceed by laying out five possible mechanisms of bias: government activity as the subject of news; government as a hero in marketable stories; government as a regulator of television and radio; effects on objectivity when government officials are used as sources; and the rise of national broadcast news organizations. I evaluate these mechanisms in the light of economic theory, examining whether they are consistent with the incentives of for-profit media. I am an economist by training, not a journalist, and thus I rely on secondary evidence concerning reporting, not personal observation. Many people blame the media for political developments they do not favor. Such arguments, however, are rarely subjected to economic analysis, much to the detriment of our understanding of the media. For example, critics on the left accuse the corporate-owned media of refusing to report harshly on business, yet such critics fail to consider the obvious collective-action problems that advertisers would face in attempting to control news content (Sutter 2002). …

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