The Sound of Silence: Anti-Defamation Law and Political Corruption

37 Pages Posted: 27 Mar 2012 Last revised: 13 May 2013

See all articles by Gabriele Gratton

Gabriele Gratton

UNSW Australia Business School, School of Economics

Date Written: April 11, 2013

Abstract

Voters use the press to keep politicians accountable. By endogenizing the response of the voters, this paper provides a theoretical foundation to disentangle the effects of media regulation on corruption and clarify under which circumstances regulation reduces or increases corruption. The analysis shows that libel laws can reduce political corruption only if the moral hazard problem dominates adverse selection and the punishment for the defamer is large enough to deter the publication of well-founded scandals. In this case, libel laws act as a substitute for an optimal re-election rule to which voters commit ex ante.

Keywords: media and democracy, corruption, defamation, chilling effect

JEL Classification: D7, K4

Suggested Citation

Gratton, Gabriele, The Sound of Silence: Anti-Defamation Law and Political Corruption (April 11, 2013). UNSW Australian School of Business Research Paper No. 2012 ECON21A. Available at SSRN: https://ssrn.com/abstract=2028738 or http://dx.doi.org/10.2139/ssrn.2028738

Gabriele Gratton (Contact Author)

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

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