The Sound of Silence: Anti-Defamation Law and Political Corruption
37 Pages Posted: 27 Mar 2012 Last revised: 13 May 2013
Date Written: April 11, 2013
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: Suggested Citation