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«Scott Ashworth2 Kenneth W. Shotts3 September 10, 2008 1 We thank seminar audiences at Berkeley, Emory, Harvard/MIT, Princeton, Stanford GSB, and Yale ...»

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Does Informative Media Commentary Reduce

Politicians’ Incentives to Pander?1

Scott Ashworth2 Kenneth W. Shotts3

September 10, 2008

1

We thank seminar audiences at Berkeley, Emory, Harvard/MIT, Princeton, Stanford GSB, and Yale for

useful comments.

2

Corresponding Author. Assistant Professor of Politics, Princeton University. Princeton, NJ 08544. Phone:

(609) 258-2153. Email: sashwort@princeton.edu.

3

Associate Professor, Stanford Graduate School of Business. 518 Memorial Way, Stanford CA 94305-5015.

Phone: (650) 725-4510. Email: kshotts@stanford.edu.

Abstract Elections sometimes give policy-makers incentives to pander, i.e., to implement a policy that voters think is in their best interest, even though the policy-maker knows that a different policy is actually better for the voter. Pandering incentives are typically attenuated when voters learn, prior to the election, whether the policy chosen by the incumbent truly was in their best interest. This suggests that the media can improve accountability by reporting to voters information about whether an incumbent made good policy choices. We show that, although media monitoring does sometimes eliminate the incumbent’s incentive to pander, in other cases it makes the problem of pandering worse. Furthermore, in some circumstances incumbent incentives are better when the media acts as a “yes man” – suppressing some information that indicates the policy-maker made the wrong choice.

We explain these seemingly paradoxical results by focusing on how media commentary affects voters’ tendency to apply an asymmetric burden of proof to the incumbent, based on whether she pursues popular or unpopular policies.

I am persuaded myself that the good sense of the people will always be found to be the best army. They may be led astray for a moment, but will soon correct themselves. The people are the only censors of their governors: and even their errors will tend to keep these to the true principles of their institution. To punish these errors too severely would be to suppress the only safeguard of the public liberty. The way to prevent these irregular interpositions of the people is to give them full information of their affairs thro’ the channel of the public papers, & to contrive that those papers should penetrate the whole mass of the people. The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter.

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An active media is often thought to be essential to a well-functioning democracy. When politicians are accountable to voters, the people must be well-informed, lest the government respond to mistaken voter impulses. Newspapers, then, ensure that “the opinion of the people” is kept right by educating citizens about the merits of particular policy choices, and, the argument goes, enhance electoral accountability.

We analyze this Jeffersonian intuition in a formal model of political accountability. Voters in the model are sometimes misinformed about their true interests. The incumbent policy maker has better information about optimal policy choices, and may thus have an incentive to pander – to implement a policy that voters believe is in their best interest, even though the policy maker’s superior information indicates the voters are wrong (Canes-Wrone, Herron, and Shotts 2001; Maskin and Tirole 2004; Prat 2005).1 1 Swank and Visser (2006) study a related mechanism in a moral hazard context. In their model, incumbents have an incentive to implement projects without properly vetting them, because voters cannot distinguish between the rejecting a bad project and failing to come up with an idea for a project at all.

We start with a baseline model without a media, and then develop two variants of the model with a media outlet (“the newspaper”). In each variant, the newspaper gets private information about which policy best serves voters’ interests, and it acts as a commentator, making statements about which policy choice is correct. The model variants differ only in the timing of the newspaper’s commentary. In the first, simultaneous, variant, the newspaper comments at the same time that the incumbent chooses policy. In the second, sequential, variant the newspaper gets to observe the policy choice before commenting; this timing allows the newspaper, in the event that it sees a weak signal indicating that the incumbent chose the wrong policy, to act as a yes man, herding on the incumbent’s choice (Bikhchandani, Hirshleifer, and Welch 1992; Scharfstein and Stein 1990).2 In both variants, the newspaper comments before the next election and is thus relevant for voters’ decision to retain or replace the incumbent, creating the prospect that media commentary might discipline an electorally motivated incumbent’s policy choice.

Our key question is: How does the presence of the newspaper affect the incumbent politician’s incentives to pander?3 Building on Jefferson’s intuition, you might think that, because the media gives voters information about whether the incumbent acted in their best interest, politicians will have less incentive to pander in the presence of a media. After all, if, at the time of the next election, voters will be perfectly informed about whether the incumbent’s policy choice promoted their interests, then the incumbent has no incentive to pander (Canes-Wrone, Herron, and Shotts 2001). So a reasonable conjecture is that an informative, though sometimes mistaken, media will improve accountability by reducing pandering.





2 Although the details of imitation in our model differ from those in Pendergast (1993), the underlying intuition of conformity is similar.

3 Prat (2005) shows that pandering incentives can be reduced if voters do not learn the incumbent’s action choice.

Besley and Prat (2006) analyze whether the media can discipline kleptocratic government officials. Egorov, Guriev, and Sonin (2007) analyze tradeoffs faced by an autocrat who can use a free media to acquire information about bureaucrats’ performance, but who worries the media might instigate a revolution by informing voters that he himself has performed badly.

–  –  –

intuition; in some circumstances, introducing a media commentator eliminates pandering. But the media does not always eliminate pandering; introducing a media can in fact lead to pandering when it would not have occurred without a media. There are circumstances, furthermore, where a yes-man media is more effective than a truthful media at reducing pandering.

To understand why the Jeffersonian intuition can fail, it helps to take a closer look at the basic pandering incentive without a media. Pandering arises because, when the incumbent and the challenger are close in terms of their prior reputations, voters treat the incumbent’s possible policy choices asymmetrically. They reelect an incumbent who chooses a popular action unless he is proved wrong, but they only reelect an incumbent who chooses an unpopular action if he is proved right. If, at the time of the next election, it is unclear which policy choice was correct, voters will re-elect the incumbent if and only if he chose the initially popular policy. This asymmetric burden of proof creates the incentive for pandering – if the public is sufficiently unlikely to learn whether the incumbent’s policy choice was correct, then choosing the action with a lower burden of proof is optimal, even when that action is unlikely to be correct.

The media eliminates pandering when it induces the voter to treat initially-popular and initiallyunpopular actions symmetrically. If the incumbent and challenger are sufficiently close in terms of their reputations, the incumbent is reelected only if his action is somehow confirmed, either by a clear public signal that he indeed chose the correct policy or, in the absence of such public information, by media commentary supporting the incumbent’s action. The two actions thus lead to the same burden of proof, and the incumbent has no incentive to pander.

If the incumbent’s reputation is moderately above or moderately below the challenger’s reputation, however, then the burden of the proof is symmetric in the absence of media commentary, and introducing a media actually breaks the symmetry. When the incumbent has a lead, for example, the voters trust his judgement enough to reelect him even if he chooses the unpopular action and no public

–  –  –

who chose the unpopular action, while a similarly contradictory report would not lead to a defeat for an incumbent who chose the popular action. Thus the asymmetric burden of proof returns and the incumbent has an incentive to pander.

Focusing on asymmetric voter responses also helps explain the potential benefit of a yes man media, one unwilling to criticize the incumbent unless it observes overwhelmingly clear information that the incumbent chose the wrong policy. When the media is a yes man, its contradictory reports are definitive, i.e., voters know that the media only criticizes the incumbent when it is sure that he chose the wrong policy. No incumbent can win in the face of such criticism. But the asymmetric burden of proof for moderately leading incumbents in the simultaneous media case arose precisely because voters gave the incumbent the benefit of the doubt when the media disagreed with the ex ante popular action. This never happens with a yes man media, so, under some circumstances, a yes man media is extremely effective at reducing pandering.

Although pandering is a response to asymmetric voter responses, it is important to note that, in our model, the media is completely even handed, i.e., symmetric, in its treatment of politicians and of policies – it does not favor a particular candidate, nor does it favor any particular policy. This may seem strange given the extant literature’s focus on media bias, both in studies that empirically estimate bias (Groseclose and Milyo 2005, Ho and Quinn 2007, Gentzkow and Shapiro 2007) and in studies that examine its origins and relationship to competition in the media industry (Page 1996, Arnold 2004, Baron 2004, Gentzkow and Shapiro 2006). In the analysis that follows we set aside all issues related to bias and competition, i.e., we analyze a model with a single, unbiased, media outlet.

We do so not because we find bias and competition uninteresting; on the contrary, we think these issues are quite important. However, for the purpose of our analysis it is important to use a best case model, in which the media is a pure provider of information. Ultimately, our goal is to assess a simple and seemingly compelling intuition – that by providing information the media reduces incentives for

–  –  –

reasons independent of bias. Even in the best case scenario, with an unbiased media, the presence of the media does not necessarily eliminate pandering, and indeed it can sometimes aggravate the problem.

The paper proceeds as follows. We first introduce the model, then present a set of common results that hold in all three variants of the model: the no-media baseline, simultaneous media announcements, and sequential announcements. Next, we examine each of the variants in more detail, and analyze how the media affects incentives for pandering. We then briefly discuss how the media affects voters’ ability to select high quality incumbents, and conclude.

The Model We want to identify the impact of the media’s announcement on the incumbent’s incentives to take the correct action. To isolate the media’s impact, we start with a baseline model without a media, using a simplified variant of the model in Canes-Wrone, Herron, and Shotts (2001). The heart of our analysis modifies this baseline model, adding a commentator to explore the media’s effect on politicians’ incentives to pander.

Baseline Model Policies and Preferences In each of two periods, a policy must be selected from the set {A, B}.

The optimal policy in a period depends on the state of the world in that period, ω ∈ {A, B}. A representative voter gets payoff 1 for each period in which the policy matches the state, and 0 for each period in which policy does not match the state. The state of the world is independent across the two periods, and in each period state A is more likely: Pr(ω = A) ≡ π 1/2. We do not introduce additional notation to distinguish the two periods, because almost all of the action in the model occurs in the first period. There is no discounting.

–  –  –

voter can either reelect the incumbent or replace him with a challenger. A politician gets payoff α 0 for matching his policy choice to the state, plus an ego rent of 1 for each period that he holds office.4 Information Structure At the beginning of each period, the voter has no information about the state, aside from the prior. The policy maker, on the other hand, gets an informative private signal, s, about the state. This signal’s precision depends on his type, θ ∈ {H, L}. A high quality type learns the true state,

–  –  –

so the restriction that q π ensures that even a low quality policy maker’s signal outweighs the prior. Types are private information and the prior probabilities that the candidates (incumbent and

challenger) are high quality are:

–  –  –

We say that the election is competitive if κI and κC are close together.

With probability ρ, the voter learns the true first period state before election day; otherwise he votes knowing only the policy choice, xI. Formally, the voter’s signal is sV ∈ {A, B, φ}, where φ means “no information”. If uncertainty resolves then sV = ω. A low ρ means that either the election 4 Politicians do not care about policy when they are not in office. This ensures that a low-quality incumbent does not want to lose office in the hopes of being replaced by a higher-quality official.

–  –  –

chosen is unlikely to produce any easily assessed short run effects.



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