How Cable News Reshaped Local Government

48 Pages Posted: 12 May 2019 Last revised: 25 Sep 2019

Date Written: April 12, 2019

Abstract

Partisan cable news broadcasts have a causal effect on the size and composition of budgets in U.S. localities. Utilizing channel positioning as an instrument for viewership, we show that exposure to the conservative Fox News Channel shrinks local government budgets, while liberal MSNBC enlarges them. Revenue changes are driven by shifts in property taxes, a key tool for local redistributive policy. Expenditure changes are driven
by public hospital expenditures, an important discretionary public good provided by local governments. We also find evidence that Fox News exposure increased privatization (while MSNBC decreased it). An analysis of mechanisms suggests that the results are driven by changes in voter preferences, but not by changes in partisan control of city governments.

Keywords: public budget, partisan media, local governments

JEL Classification: H41, D72, l82

Suggested Citation

Galletta, Sergio and Ash, Elliott, How Cable News Reshaped Local Government (April 12, 2019). Available at SSRN: https://ssrn.com/abstract=3370908 or http://dx.doi.org/10.2139/ssrn.3370908

Sergio Galletta (Contact Author)

ETH Zurich ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

Elliott Ash

ETH Zurich ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

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