No News is Bad News: The Internet, Corruption, and the Decline of the Fourth Estate

The rise of the internet has upended numerous industries, but none more so than news production. The connectivity fostered by digitization has been accompanied by the emergence of content aggregation, the proliferation of fake news, and the extended geographic reach of industry leaders, all of which have served to hollow out local reporting capacity. In this work, we examine the result of changes wrought by the internet on an outcome of theoretical and practical significance: corruption. Inasmuch as newspapers are viewed as an important investigative arm of local communities, it is possible that corrupt local actors will be emboldened in their absence. To test this hypothesis, we employed a difference-in-differences approach, exploiting the phased closure of major daily newspapers across the country. Our results indicate a significant and positive correlation between federal corruption charges and newspaper closures. Further, we observed no evidence that the rise in online news vendors or the democratization of the press ameliorates this effect. This suggests a key issue with the increased geographic reach of digitized firms in the form of “information blindness” to local issues.