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

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  • Gabriele Gratton

    (School of Economics, The University of New South Wales)

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.

Suggested Citation

  • Gabriele Gratton, 2013. "The Sound of Silence: Anti-Defamation Law and Political Corruption," Discussion Papers 2012-21A, School of Economics, The University of New South Wales.
    • Handle: RePEc:swe:wpaper:2012-21a
    as

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    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2012-21.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    media and democracy; corruption; defamation; chilling effect.;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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