Where Did All the Investigative Journalism Go? the Economics of the Expose

By Shafer, Jack | Reason, April 2017 | Go to article overview

Where Did All the Investigative Journalism Go? the Economics of the Expose


Shafer, Jack, Reason


SLOSHED ON 30 percent profit margins, the news media went on a drunkard's tear over the final three decades of the 20th century. Some publishers, such as Gannett, spent their loot acquiring more newspapers. The Boston Globe blew a portion of its windfall on foreign bureaus, establishing its first in the early 1970s and eventually expanding to five. Newspapers everywhere expanded regional and national bureaus, sprouted additional sections, added color printing, hired more journalists, and boosted circulation as the money bender continued.

Almost every news outlet--print or broadcast--spent heavily on investigative journalism, producing a scoop renaissance. The Johnny Deadlines dug deep to bust crooked cops, call out polluting corporations, and expose criminal justice outrages. Health care fraud, banking hijinks, payoffs, bribes, and government waste got a full press airing.

But the renaissance stalled at the new century mark as cable TV and the web encroached on the advertising monopoly the press had grown sozzled on. Then came the 2008-09 recession, reversing the grand expansion. The Globe closed all of its foreign bureaus; newspapers shed their suburban and regional bureaus; whole newspaper sections folded; and tens of thousands of journalists got sacked.

The investigative beat took a hit too, as James T. Hamilton, a Stanford professor of communications, explains in his comprehensive study, Democracy's Detectives: The Economics of Investigative Reporting. Unmistakable proof of the decline: No trade honors itself as grandly as journalism, so submissions to investigative award programs are a fine marker of how much of that genre is being produced. During the 2008-09 recession, submissions to the popular Investigative Reporters and Editors contest dropped 34.1 percent compared to 2006-07, indicating the extent of the cutback.

The biggest losers haven't been journalists--who cares about them, any way?--but members of the public, from whom more perfidy is concealed, while public officials, bureaucrats, and corrupt businessmen have scored. "Which stories get discovered where depends on economics," Hamilton writes. By bringing the economist's eye to the business of investigative journalism, Hamilton sharpens our appreciation of the craft as he explores its history, the motivations publishers have to fund the work, and the cash benefits investigations pay out.

Investigative journalism, Hamilton tells us, produces extraordinary benefits--perhaps billions of dollars' worth. A journalistic investigation of government waste can save taxpayers a lot of dough if officials pay attention. A successful probe of commercial fraud can likewise prevent crooks from looting millions from consumers and investors. And where a dollar figure can be placed on health, the best investigations can save untold millions when policies change.

The tragedy of investigative journalism is that its publishers can never come close to fully monetizing those benefits. Investigative journalism, in the economist's parlance, produces positive externalities by the tanker-load which almost everybody except news outlets ends up reaping. If it were feasible for an outlet to claim even a tiny vig from the benefits they produce, we'd likely see tons more investigations.

Instead, investigative journalists and their publishers must depend on indirect payouts. Reporters can reap psychic income for their work, for example, and the proliferation of investigative journalism prizes show that they're cleaning up in that market. Some publications back investigative projects for partisan reasons. Others depend on them as part of the bundle that attracts paying customers and advertisers. Still others publish investigations out of a desire to change or improve the world.

Because the number of readers willing to help underwrite ambitious investigations is always relatively few, and because news outlets can never capture the benefits generated by their work, many projects depend on a pattern of direct subsidies--the NPR, ProPublica, and Mother Jones nonprofit model. …

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