Dead Watchdogs Don't Bark: The impact of the decline of local news on decentralization, talent discovery and party structure

How does the continuing decline of local news affect local politics, and what are its implications for the national political economy? Local politicians play a vital role in democracies by adapting local policy based on local knowledge. But without a local watchdog, politicians might abuse this informational advantage. Building on the empirical literature, this paper develops a model in which the decline of local news leads to an increase in abuse of office. But it also undermines two channels which usually improve politicians behavior: career and electoral incentives. Career incentives become less efficient, as politicians with national ambitions start to ignore local circumstance and instead follow the national party line to ensure they are not suspected of misbehaving. Electoral ambitions break down, as politicians with purely local ambitions start sharing the spoils of office with the local population, at the expense of national welfare. In this way, the decline of local news endogenously affects the efficiency of local policy making, the structure of political parties and careers, and the discovery of political talent.